Italian Banks support Digital Euro

The European Central Bank (ECB) has recently revealed its plans to develop a Central Bank Digital Currency (CBDC), and Italian banks are showing their support, as long as their intermediary role is secured.

The digital revolution has impacted industries worldwide, with the banking sector seeing major changes in recent years. The introduction of cryptocurrencies and blockchain technology has shaken the foundation of traditional banking systems, leaving financial institutions wary of what's to come. The European Central Bank (ECB) has recently revealed its plans to develop a Central Bank Digital Currency (CBDC), and Italian banks are showing their support, as long as their intermediary role is secured.

The Italian Bankers Association (ABI), the country's 700 commercial banks, has been a leading supporter of the digital euro and has been vocal in support of the CBDC. In its most recent report, the ABI reiterated its support for the digital euro while calling for banks to be compensated for their role in distributing the digital currency. The report stated that Distributed Ledger Technology (DLT) enables a more distributed model for participants than the traditional one by effectively managing the allocation of responsibilities between the central bank and the central bank, the report states. digital euro distributors.

Italian Banks support Digital Euro ph: instagram@bigstar756

As with banking institutions globally, the ABI's primary interest in CBDCs is the elimination of the intermediary role of commercial banks. While users can directly access central bank money, they could bypass commercial banks, eventually leading to capital loss. The ABI urges the ECB to maintain the intermediary role of banks as a basic principle when developing CBDCs, and banks should be incentivized or compensated for their role in the digital euro cycle as banks will incur high costs associated with anti-money laundering (AML) checks or settlements, dispute resolution.

Eliminating bank intermediaries is a common concern globally as CBDCs are introduced. During the recent attack on the digital dollar, Florida Governor Ron DeSantis stated that the digital dollar would drive banks out of business. To avoid this, the Association of German Banks has also called for commercial banks to be adequately compensated for their role in the distribution of the digital euro, arguing that commercial banks would help the ECB fulfill its public duties and should, therefore, be compensated.

While Italian banks are showing their support for the digital euro, they also make it clear that they don't want to be pushed out of business. The ECB will create the digital euro, but it will be distributed by existing commercial banks. The digital currency must also not compete with existing commercial banking tools and must enable value-added services, ideally using DLT. The ABI has previously called for a programmable digital euro, a recommendation the ECB opposes, stating it would limit its use and eliminate the euro's fungible nature.

While the introduction of CBDCs is an exciting development, it's vital that the intermediary role of commercial banks is secured. Banks play a significant role in distributing money, and without their involvement, the introduction of CBDCs could lead to significant problems. It's essential to develop a digital currency system that works for everyone, and with the support of Italian and German banks, we're heading in the right direction.