Italian Banks are preparing to test the digital euro

BlockBeats - The ABI, a consortium of more than 700 Italian banking institutions, says it wants to help speed up the implementation of digital currencies backed by the European Central Bank (ECB) by participating in projects and experiments.

Last year, ABI set up a working group to look at digital and cryptographic assets. In its statement on Thursday, the panel Shared 10 considerations for the digital euro, starting with "the need for monetary stability and full compliance with the European regulatory framework as a priority." It prioritised the need for the digital currency framework to be fully compliant with EU regulations in order to win public trust and said Banks would play a key role in maintaining that trust. ABI says in its second guide that Italian Banks are already referring to the Spunta project and are using distributed ledger technology. The project is a project initiated by ABI LABS to integrate blockchain to speed up the processing of interbank clearing.

According to the panel, central bank digital currency (CBDC) will lead to future innovations in traditional banking systems, such as P2P transactions, machine-to-machine transactions and the ability to manage exchange rate and interest rate risk due to its programmable functions.

"Programmable digital currencies represent an innovation in finance that can revolutionize currencies and exchange rates. This is a transformation that has huge potential value added, particularly in terms of operational and management process efficiency."

Italy is not the first country to be interested in experimenting with the digital euro. Earlier this year the French central bank launched a call for experimental CBDC schemes. The Dutch central bank also announced that the Netherlands is willing to experiment with digital euros.

In a speech last year Jens Weidmann, the head of Germany's central bank, warned that CBDC could destabilise the financial system. Later this year, the German banking Association issued a statement calling for a programmable digital euro.

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