Italian Banks Back Digital Euro But Urge ECB To Spread Out “Very High” Costs

Italian banks have expressed their support for the European Central Bank's (ECB) initiative to introduce a digital euro, but they are requesting that the costs associated with this project be spread out over time.

Marco Elio Rottigni, the General Manager of the Italian Banking Association (ABI), stated during a press seminar in Florence, "We're in favour of the digital euro because it embodies a concept of digital sovereignty."

Rottigni added, "Costs for the project, however, are very high in the context of the capital expenditure banks must sustain," and suggested that these costs "could be spread over time."

ECB's Goal: Strengthening European Monetary Sovereignty

The ECB has been actively developing a digital version of the euro with the primary objective of enhancing the European Union's monetary sovereignty.

Through the proposed digital euro, the ECB aims to ensure that central bank money remains accessible and relevant in an increasingly digital economy. Simultaneously, the ECB seeks to reduce the reliance on non-European payment service providers, a move directly addressing the growing prevalence of stablecoins.

Despite these aims, the legislative process for the proposed Central Bank Digital Currency (CBDC) has encountered resistance, particularly from some German and French banks. These institutions have voiced concerns that the digital euro could lead to a significant drain of liquidity from bank deposits as individuals might opt to use an online ECB wallet for their daily transactions.

Recently, the ECB’s Governing Council decided to move the digital euro project into its next phase, following the conclusion of a two-year preparation period. The anticipated launch is set for 2029, with a pilot phase commencing in 2027. However, this timeline is contingent on the adoption of EU legislation, which is expected in 2026.

Scaled-Down CBDC Version Proposed to Accelerate Rollout

The assessment of the digital euro is being led by Fernando Navarrete, a European parliament member from Spain’s Partido Popular. On October 28, he introduced his draft report, which advocates for a scaled-down version of the scheme. This approach aims to safeguard private payment initiatives, such as Wero.

Rottigni commented on this, stating, "We’re in favour of a twin approach, a central bank digital currency and commercial bank digital currencies which may develop faster, because what Europe shouldn’t do is fall behind."

US Fed Governor Highlights Need for Policy to Match Stablecoin Growth

The ECB's digital euro initiative unfolds against the backdrop of a burgeoning stablecoin market. This growth was significantly influenced by the signing of the GENIUS Act into law in the United States by President Donald Trump in July.

According to CoinMarketCap, the market capitalization of stablecoins has surged to $313 billion. Tokens pegged to the US dollar, such as Tether's USDT and Circle's USDC, are leading this market.

Federal Reserve Governor Stephen Miran has cautioned that the widespread adoption of stablecoins necessitates that policymaking keeps pace with the market's rapid expansion.