The Italian Banking Association published guidelines that it deems necessary to adopt CBDCs. The agency is willing to participate in tests of digital currencies in Europe.
The Italian Banking Association (ABI), which groups more than 700 financial entities, has released the guidelines that it considers necessary for the adoption of a central bank digital currency (CBDC) in Europe, showing its support for the possible launch of the digital euro.
In a post on the Association’s website on June 18th, Italian banks expressed their willingness to participate in projects and experiments for the development of a CBDC of the European Central Bank.
They claim that thanks to the skills acquired while building infrastructures linked to blockchain technology, they can accelerate the implementation of an initiative at the European level.
The group thus recalls the progress of Italian banks in the use of blockchain through the Spunta Banca Project. In 2019, this initiative allowed processing the reconciliation of data for an entire year of local banking activity through the Corda platform.
The ABI explains that a group that has been working on digital currencies since last year was in charge of developing the guidelines. This material bases on some of the characteristics of CBDCs.
Among the ideas presented, the ABI notes that central bank digital currencies represent a financial innovation capable of revolutionizing money and the forms of exchange whilst representing advances for traditional banking. In this sense, the ABI considers that this type of currency allows preserving the properties of cash, incorporating the benefits of the digital world.
Furthermore, it is necessary to preserve the monetary stability and full respect of the European regulatory framework. The document states that banks play a crucial role in this regard to “maintain the effectiveness of the mechanisms for transmitting monetary policy and regulatory compliance.”
The ABI also mentions the issue of security and privacy, since it considers it important that citizens can trust digital money.
Support for the Digital Euro
The group supports the creation of the digital euro, a project that the European Union proposed in November 2019. This served as the basis for the European Central Bank (ECB) to launch a proof of concept (PoC), at the end of last year.
Despite these advances and the recognition of the advantages of CBDCs, the ECB has no plans to issue a digital currency in the short term, without first thoroughly evaluating the implications of these assets for the stability of the financial system. To do this, it is still analyzing its possible effects on the monetary policies of the countries of the region, as the financial institution expressed last May.
An increasing number of banking institutions in Europe seems ready to develop digital central bank currencies in support of the digital euro project.
Before the ABI’s pronouncement in Italy, the Central Bank of France announced the results of the first test of its blockchain-based digital currency, which it recently completed. The agency added that it will conduct further tests with other participants, as part of its experiments with the digital euro.
The project for the creation of the digital euro has also received support from the Central Bank of the Netherlands and the German Association of Private Banks (Bankenverband), representing more than 200 banking institutions.
By Alexander Salazar
