Italy’s Banking Sector Backs ECB’s Digital Euro Initiative Amid Cost Concerns
Italy’s banking sector has expressed strong support for the European Central Bank’s (ECB) proposed digital euro project, seeing it as a vital step to retain Europe’s digital sovereignty and reduce dependence on non-European payment providers like U.S.-based card networks and stablecoins.
While enthusiastic about the digital euro initiative, Italian banks are also advocating for a flexible, long-term payment plan to manage the substantial implementation costs. They have described these costs as “very high,” especially when considering other ongoing capital expenditures.
“We’re in favor of the digital euro because it embodies a concept of digital sovereignty,” ABI General Manager Marco Elio Rottigni said on Friday. “Costs for the project, however, are very high in the context of the capital expenditure banks must sustain; they could be spread over time.”
**Italy’s Support Comes With a Caveat**
The primary purpose of the digital euro, the ECB’s digital version of the single currency, is to strengthen the euro area’s monetary sovereignty while reducing reliance on non-European payment service providers and addressing the rise of stablecoins.
However, the legislative process has been slow due to opposition from some French and German banks. These banks are concerned that millions of Europeans might switch to using an online ECB wallet for daily payments, which could lead to a significant outflow of deposits from traditional banks.
Despite this opposition, the ECB’s Governing Council has advanced the digital euro project to its next phase after completing a two-year preparation period.
“We’re in favor of a twin approach: a central bank digital currency alongside commercial bank digital currencies, which may develop faster,” Rottigni explained. “What Europe shouldn’t do is fall behind.”
The digital euro launch is expected in 2029, following a pilot phase anticipated to begin in 2027, contingent upon the adoption of EU legislation expected in 2026.
Meanwhile, European Parliament member Fernando Navarrete of Spain’s Partido Popular, responsible for the parliament’s assessment of the digital euro, submitted a draft report on October 28 promoting a scaled-down version of the scheme. The report advocates safeguarding private payment initiatives such as Wero, which is backed by 14 European lenders. This stance highlights that, while generally supportive, some parliamentary voices seek established safeguards against potential financial strain.
**Global CBDC Developments**
While the introduction of central bank digital currencies (CBDCs) presents systemic risks—including potential cyberattacks and digital bank runs, which require robust governance and security—several countries are moving forward.
China has been preparing its CBDC for years and, as of 2025, has deployed its digital yuan in eighteen countries, including Thailand, Kazakhstan, and the United Arab Emirates. Observers view these efforts as attempts to maintain monetary sovereignty.
Other notable CBDC initiatives include:
– **United Kingdom’s Britcoin**: Currently limited to sandbox testing.
– **Japan’s Digital Yen**: Intended as an alternative to China’s digital yuan but advancing cautiously.
– **Sweden’s e-Krona**: An open-source digital currency with partial anonymity for small payments, currently in testing.
– **Brazil’s DREX**: Designed to integrate with smart contracts for social assistance programs, promoting financial inclusion.
In contrast, U.S. legislative efforts are focused on regulating private stablecoin issuers rather than issuing a CBDC. The Federal Reserve is barred from creating its own CBDC due to concerns over monitoring and surveillance risks.
—
If you’re reading this, you’re already ahead. Stay informed with our newsletter.
https://bitcoinethereumnews.com/finance/italy-backs-the-digital-euro-but-asks-ecb-to-spread-out-high-implementation-costs/