Italian Banks Back ECB’s Digital Euro Initiative but Urge Cost Spreading

Italian banks have expressed strong support for the European Central Bank’s (ECB) digital euro initiative, emphasizing the importance of digital sovereignty. However, they are urging that the implementation costs be spread over several years to ease the financial burden on the sector.

“We’re in favour of the digital euro because it embodies a concept of digital sovereignty,” said Marco Elio Rottigni, General Manager of the Italian Banking Association (ABI), during a press seminar held in Florence, Reuters reported on Friday. He added, “Costs for the project, however, are very high in the context of the capital expenditure banks must sustain. They could be spread over time.”

Resistance from Other European Banks

The comments come amidst resistance from some French and German banks regarding the central bank digital currency (CBDC) project. These institutions fear that the introduction of an ECB-backed retail wallet could lead to a significant drain of deposits from commercial lenders.

Progress on the Digital Euro Project

At its meeting on October 29-30 in Florence, the ECB’s Governing Council approved moving the digital euro project into its next phase after a two-year preparatory period. A pilot phase is expected to begin in 2027, with a full rollout tentatively scheduled for 2029, provided that EU legislation is adopted in 2026.

Balancing Innovation and Private Payment Systems

European Parliament member Fernando Navarrete, who is overseeing the parliament’s review of the proposal, recently presented a draft report. It calls for a scaled-down version of the digital euro to protect private payment systems such as Wero, a joint initiative by 14 European banks.

A “Twin Approach” for Europe

Rottigni suggested that Europe should pursue a “twin approach,” combining the ECB’s digital euro with commercial bank-backed digital currencies. “What Europe shouldn’t do is fall behind,” he stressed.

ECB Advances Technology Partnerships

Last month, the ECB finalized framework agreements with seven technology providers to support the development of the potential digital euro. These agreements cover fraud and risk management, secure payment data exchange, and software development.

Among the companies involved are fraud-detection specialist Feedzai and security technology firm Giesecke+Devrient (G+D). According to the ECB, the selected firms will also work on features such as “alias lookup,” which enables users to send or receive payments without needing to know the recipient’s payment service provider, as well as offline payment capabilities.

Conclusion

While Italian banks embrace the digital euro as a critical step toward digital sovereignty in Europe, they advocate for a cautious and financially manageable implementation strategy. As the project moves forward, collaboration between public and private stakeholders remains key to ensuring a successful and inclusive European digital currency rollout.
https://cointelegraph.com/news/italian-banks-back-digital-euro-urge-ecb-to-stagger-costs