In a statement by the Italian Banking Association (ABI), banks are in favour of a European digital currency.
In particular, the statement reveals that the Executive Committee of ABI has approved the general guidelines for the Central Bank Digital Currency (CBDC), stating explicitly:
“Thanks to the skills acquired in the implementation of infrastructure and distributed governance, Italian banks are willing to participate in projects and experiments for a European Central Bank Digital Currency, accelerating its implementation in a first nation”.
Italy is using as legal tender the Euro, issued by the European Central Bank (ECB), which means that Italy is expected to have a digital Euro as a possible CBDC.
Moreover, in France, another country in the Eurozone, the tests on the digital euro have already begun last month, so the ABI statement does not come as a surprise.
On the contrary, it suggests that several Eurozone countries are seriously considering the possibility of having a digital euro, starting with technical testing aimed at bringing to light any structural problems.
For example, last year the ABI itself set up a working group dedicated to the aspects related to digital currencies and crypto assets, and it is this group that has developed ten considerations shared with the Executive Committee of the association.
Monetary stability remains the top priority with regard to the euro, besides, Italian banks already use DLT (Distributed Ledger Technology). Furthermore, they declare that they want to play their part in these changes introduced by digital currencies.
The press release explicitly states that a programmable digital currency would be an innovation capable of profoundly revolutionizing currencies and their circulation, with a potential significant added value, especially in terms of the efficiency of operational and management processes.
In this respect, the CDBC is identified as the most appropriate tool to reconcile innovation requirements with the current regulatory framework.
It is also stressed that such an instrument could:
“Reduce the attractiveness of instruments of comparable use but issued by private entities or (in cases of full decentralization) not identifiable, characterized by an inherently higher risk profile”.
Therefore, the ABI stresses that already at this stage there would be private competitors to the fiat currency, probably referring in particular to stablecoins.
In fact, it explicitly calls for a European CBDC to be issued to the public as an evolution of cash.
As a result, on the one hand, the digital euro should act as an alternative to private cryptocurrencies, and in particular to stablecoins, while on the other, it should act as an alternative to physical banknotes.
The statement also points out that a European CBDC would favour the transmission of value between peers, thereby also facilitating exchanges between people and machines or between machines, and that it could support smart contracts, thus reducing administrative processes.
In other words, the association of Italian banks strongly supports this innovation, provided that it is implemented and managed by the central bank and does not damage the current financial system.
