In a recent position paper, the Italian Banking Association (ABI) expressed broad support for the adoption of a digital euro and outlined three pillars to guide the design of a future central bank digital currency (CBDC). Notably, the ABI wants the digital euro to enable new innovative services, such as programmable payments, using distributed ledger technology (DLT).
“DLT enables a more distributed model for participants than the traditional one by effectively managing the allocation of responsibilities between the central bank and the digital euro distributors”, the report said.
However, DLT is generally not seen as sufficiently scalable for retail use among central bankers. On the other hand, blockchains could be used for wholesale transactions, albeit at probably lower volumes. For example, the ABI already uses Spunta, a blockchain-based solution for interbank reconciliations, which is used by more than 100 financial institutions representing 90% of Italy’s banking industry. Still, the platform currently runs overnight; a real-time, round-the-clock solution could be a different story.
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