FLORENCE, Italy – November 8 (Reuters) – Italy’s banking sector has thrown its support behind the European Central Bank’s digital euro project, but is pushing for a phased approach to the significant investments required for its implementation.
A top official in the Italian Banking Association, ABI, said that though Italian banks support the digital central bank currency, or CBDC, initiative, the financial outlay required is considerable; these costs need to be “spread out over time.”
The ECB believes that the digital euro would play an important role in enhancing monetary sovereignty, in ensuring ongoing access to central bank money in a digital world, and in reducing dependence on foreign providers of payment solutions.
Cost Concerns Amidst Skepticism
Italy’s support comes amidst the opposition of other major European lenders, especially those in France and Germany. They are afraid that the introduction of an online wallet for daily payments managed by ECB could create a “drain” on commercial bank deposits.
Despite these obstacles, the ECB’s Governing Council decided to advance the digital euro project to the next stage at its meeting on 29-30 October, after a two-year preparatory phase.
The official launch of the digital euro is expected in 2029, after a pilot phase in 2027. For that, however, the adoption of the relevant European Union legislation is needed, expected in 2026.
Legislative Pushback and Alternative Proposals
The legislative process is not, however, totally clear-cut. Fernando Navarrete, the European Parliament rapporteur overseeing the assessment, last month issued a draft report calling for a watered-down version of the scheme. The proposal would protect private payment projects, such as pan-eurozone payment network Wero, which is already supported by 14 European banks.
The overarching aim with the digital euro is also to offer a stable, public alternative to the rise of stablecoins and non-European payment solutions.