The Italian Banking Association announced that it would be ready to start working on a digital currency of the European central bank.
The Italian Banking Association (ABI) has revealed that it would be willing to support the implementation of a digital currency from the European Central Bank.
According to an update June 18 on the ABI website, the association had approved the guidelines governing its position on the digital currency and digital currencies of the central bank (CBDC).
ABI, representing a group of banks in Italy, stated that it was ready to "participate in projects and experiments related to a digital currency of the European Central Bank to accelerate the implementation of an initiative at European level".
“Digital money must be fully trusted by citizens. For this, it is essential that the highest standards of regulatory compliance, safety and supervision are met, "said the group. The ABI cited "monetary stability" and respect for rules related to the digital euro as two of its top priorities.
Why a digital euro brings benefits
By introducing a public digital euro, the European Central Bank could offer a safer and more efficient alternative to bank money and cryptocurrencies.
Right now, people have no choice but to use private banks, other than hoarding cash under a mattress. I advocate the introduction of a public digital currency system in the Eurozone. With such a system, the ECB would essentially allow citizens to store their money in the central bank and make all kinds of basic payments and transactions with it.
The digital euro does not replace physical money, but will improve and simplify the system in general. Germany, for example, is a European country and belongs to the euro zone, which means that it uses the euro. Although Germany is somewhat ambivalent about the digital euro, German companies such as online casino Spinia DE, support it. The reason is that in Germany there are strict rules on online gambling, to be more precise it is prohibited in Germany. For these companies the Euro Digital can be useful, because it will help them find international clients.
The digital euro system interacts with the private banking system, which means that people could move their money from their commercial bank accounts to their digital euro account and vice versa. A “digital cash” system would eliminate the need for the government to bail out banks “too big to fail” because the money stored in the central bank would be risk-free. This system may make deposit insurance plans less necessary.
Public digital currencies would eliminate the banking system's privileged access to central bank money. By allowing people to use central bank money as well, the concentration of economic power in a few large institutions would be reduced. Because people would have more freedom with their money and fewer implicit public subsidies, it would force the banking system to be more ethically responsible and competitive.
Creating a digital euro
The association stated that the creation of a European CBD could allow for a greater number of cross-border P2P transactions, reduce the impact of interest and exchange rates, and generally only reduce the size of the bureaucratic process of payments.
According to the ABI, the development of a digital currency in the European Union (EU) could replace the demand for cryptocurrencies.
"The existence of a European CBDC could reduce at the same time the attractiveness of instruments that are comparable in use but issued by individuals or (in cases of complete decentralization) that cannot be identified, characterized by an intrinsically higher risk profile."
Cointelegraph reported that France became the first country to successfully test a digital euro, operating on a blockchain, on May 20. The Dutch Central Bank said it was "ready to play a leadership role" for CBDCs in the EU.
ABI already applies Distributed Ledger Technology (DLT) to its blockchain-powered interbank system. The project, called Spunta, is related to the inclusion of Italy in a group of six other European nations, Malta, France, Cyprus, Portugal, Spain and Greece, which agreed to promote the use of DLT in the EU.