Yesterday the Italian banking Association ABI announced the willingness of Italian banks to participate in the central bank digital currency (CBDC) work of the European Central Bank (ECB). Update: in December it launched a project.
The Association highlighted its experience in the Spunta project, a blockchain initiative that automates the interbank reconciliations of most of the Italian banking sector. Given that experience, it could indeed be a good candidate as a trial nation for a digital euro.
An existing working group within the Association is focused on digital currency and crypto assets and they outlined ten CBDC considerations that they wanted to share. For example, the importance of complying with EU laws, the need for widespread trust and usability, and that a CBDC might help to reduce the attraction of “higher risk” cryptocurrencies.
The group also highlighted potential future innovations that a CBDC might enable, such as P2P transactions, machine-to-machine payments, a reduction in interest rate and counterparty risks, and the ability to have smart or programmable money.
Several countries within the eurozone have put forward why they might get involved in CBDC research. The Banque de France has been conducting some of its own tests and two months ago the Central Bank of Netherlands said it wanted to play a leading role. Last year the Association of German Banks set out its thoughts on the digital Euro.
Meanwhile, the ECB is moving forward with testing CBDC scenarios. One of the more recent publications was a paper exploring how a CBDC might deter use as a store of value.