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

Italian banks say they support the European Central Bank’s (ECB) effort to introduce a “digital euro,” but want costs for the project staggered over time.

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

“Costs for the project, however, are very high in the context of the capital expenditure banks must sustain,” Rottigni said, adding that these costs “could be spread over time.” 

ECB Wants To Strengthen European Area’s Monetary Sovereignty 

The ECB has been working on a digital version of the euro to strengthen the EU’s monetary sovereignty. 

With the proposed digital euro, the ECB is trying to ensure that central bank money remains accessible and relevant in an economy that is becoming increasingly digital. At the same time, the ECB also wants to reduce reliance on non-European payment service providers in direct response to the rise of stablecoins.

However, the legislative process for the proposed Central Bank Digital Currency (CBDC) has struggled to build momentum because some German and French banks in particular have opposed the initiative.

They say the digital Euro could lead to a massive liquidity drain on bank deposits as people begin to use an online ECB wallet for daily payments. 

Recently, the ECB’s Governing Council has decided to advance the digital euro project to its next phase. This follows the completion of a two-year preparation period. 

The launch is expected in 2029 after a pilot phase in 2027, but will be contingent on the adoption of EU legislation that is expected in 2026, according to the report. 

Scaled Down Version Of CBDC Proposed To Accelerate Rollout

The assessment of the digital euro is being headed by European parliament member Fernando Navarrete of Spain’s Partido Popular. 

He introduced his draft report promoting a scaled down version of the scheme on Oct. 28, which  safeguards private payment initiatives such as Wero.

“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,” Rottigni said.

US Fed Governor Says US Policy Needs To Catch Up With Stablecoin Growth

The ECB’s digital euro initiative comes amid a boom in the stablecoin market, which was ignited by the signing of the GENIUS Act into law in the US by President Donald Trump in July. 

Stablecoin market overview (Source: CoinMarketCap) 

The market capitalization of the stablecoin market has surged to $313 billion, according to CoinMarketCap. Leading the market are tokens pegged to the US dollar, such as Tether’s USDT and Circle’s USDC. 

Federal Reserve Governor Stephen Miran has warned that widespread adoption of stablecoins means policymaking needs to catch up with the market’s rapid growth.