An experimental project involving the digital euro has been launched in Italy.
This was revealed by the Italian Banking Association (ABI), which is carrying out the project together with the association’s research centre for innovation, ABI Lab. The aim is to:
“actively contribute to the public debate and to support banks operating in Italy in the path of preparation for the future scenario”.
In fact, this project focuses on the role that banks could play in a new setting in which the European Central Bank launches a digital euro on the market.
Banks currently issue and manage money under the authorization of the ECB, and a digital currency issued and controlled exclusively by the central bank could revolutionize current processes.
This has often been one of the main doubts raised by critics, and ABI’s trial could provide some answers.
Another key point that will be tested is the “programmability” of the new hypothetical digital currency, thanks to the use of smart contracts that are currently impossible with the current monetary system.
Italy studies a digital euro based on DLT
In fact, ABI’s project aims to investigate the technical feasibility of a digital euro based on DLT (Distributed Ledger Technology), i.e. a system of distributed ledgers that make it possible to make money programmable.
The experimentation will focus on the infrastructure and the distribution model, in order to assess its technical feasibility and programmability, as well as to test new and different use cases compared to the electronic payments already available today.
The first “development site ” for the infrastructure and distribution model will be developed in collaboration with Sia, and will use the ABI Lab Chain bank infrastructure, which already has 100 nodes distributed throughout the country.
The second, dedicated to programmability, will instead be more articulated and dedicated to several new hypothetical use cases, in collaboration with the banks themselves and the companies Ntt Data, Pwc and Reply.
The ABI statement also affirms that the ECB is “actively working” on the possibility of issuing a digital euro, and that it regards as appropriate to prepare for a possible launch of a digital euro for three strategic reasons
- to support the digitization of the European economy,
- to outgrow the use of cash
- to respond to a scenario of increased use of digital currencies issued by private individuals or other central banks.