Italian banks have expressed support for the European Central Bank’s (ECB) initiative to introduce a digital euro, but they urge a staggered approach in funding costs. The Italian Banking Association (ABI) General Manager Marco Elio Rottigni highlighted this stance during a press event in Florence. While recognizing the potential benefits of the digital euro, particularly its role in fostering digital sovereignty, Rottigni emphasized that high capital expenditure required to implement such a project necessitates phased cost allocation over time.
The ECB’s primary objective is to strengthen European monetary sovereignty through a digital euro, ensuring access to central bank money remains relevant within an increasingly digitized economy. This initiative also aims to mitigate reliance on non-European payment providers in response to the surge of stablecoins.
However, the legislative process for the Central Bank Digital Currency (CBDC) has encountered hurdles due to resistance from certain German and French banks who fear a significant liquidity drain as people shift towards online ECB wallets for daily payments. These concerns have led to a cautious stance on the digital euro’s potential impact.
Despite these challenges, the ECB’s Governing Council has decided to advance the digital euro project to its next phase. The pilot phase is expected in 2027, with official launch slated for 2029 after EU legislation is finalized in 2026. An alternative proposal for a scaled-down version of the digital euro project has been put forward by European Parliament member Fernando Navarrete.
The ECB’s digital euro initiative coincides with a rapid expansion in the stablecoin market, spurred by the recent enactment of the GENIUS Act in the US.
This surge in the stablecoin market, which reached $313 billion according to CoinMarketCap, has raised concerns among U.S. policymakers who fear their regulatory frameworks may lag behind the market’s rapid pace.
Meanwhile, Stephen Miran, a Federal Reserve Governor, has cautioned about the need for policy adjustments to keep pace with the market’s explosive growth of stablecoins.