The Italian Banking Association (ABI) revealed Thursday that its banks want to pilot a digital euro.
ABI, composed of over 700 Italian financial institutions, expressed its wish to aid accelerate the execution of a digital currency backed by the European Central Bank (ECB) by taking part in related jobs as well as experiments. In 2014, ABI set up a functioning group to study digital as well as crypto assets.
The team shared 10 factors to consider for an electronic euro in Thursday’s news, starting with, “Monetary stability and full compliance with the European governing structure have to be preserved as an issue of top priority.”
The team focused on the demand for an electronic currency framework to be fully compliant with EU regulations to win the public’s trust, and also said financial institutions will play an important role in maintaining that trust.
In its second standard, the team claimed Italian financial institutions are already dealing with distributed ledger technology, referencing the Spunta project. The project was a campaign by the ABI Lab to incorporate blockchain to quicken the handling of interbank settlements.
According to the group, a central bank digital currency (CBDC) would certainly result in future technologies to the standard banking system like P2P purchases, machine-to-machine deals and the capacity to manage currency exchange rate and rate of interest risk thanks to the programmable capabilities of digital money.
“A programmable digital currency represents an innovation in the financial field capable of profoundly revolutionizing money and exchange. This is a transformation capable of bringing significant potential added value, particularly in terms of the efficiency of the operating and management processes,” the statement claimed.
Italy is not the first country to express the interest to experiment with the digital euro. Previously this year, France’s reserve bank sent out an ask for proposals for CBDC experiments. The Dutch Central Bank likewise revealed the Netherlands wanted to test an electronic euro.
In 2015, the head of Germany’s Central Bank Jens Weidmann, in a speech, cautioned that a CBDC can destabilize financial systems. Later in the year, the Association of German Banks made an announcement supporting for a programmable digital euro.
The Italian Central Bank has yet to discuss ABI’s announcement.