The central bank digital currency (CBDC) is becoming a considerable concept and need of the hour for the nations around the world. Many nations coming forward and setting out the pilot projects to launch the governance of CBDC and looking forward to the positive outcomes, especially in the upcoming stages of global economic slowdown conditions.
One such step has recently taken by the executive committee of the Italian Banking Association (ABI) (Associazione Bancaria Italiana). The ABI is a voluntary trade association founded in 1919 to support the trade industry of Italy. It is a non-profit organization and founded with a purpose to represent, promote, and look after the collaborative interests of its banking members and other financial intermediaries.
On June 18, 2020, the ABI published an update on its official website mentioning the support towards the implementation of digital Euro or European Central Bank Digital Currency (CBDC) to speed up the launch process. The ABI also issued few guidelines towards governing its position and approval of digital currencies and CBDC plans from European Central Bank members.
The update shows that “Italian banks are available to participate in projects and experiments of a digital currency of the European Central Bank.”
According to the update, the Italian Banking Association is also ready to participate in the Digital Euro (European CBDC) project.
The ABI revealed its already established group which is working from the last year towards the multifaceted aspects of “digital coins and crypto assets, to speed up the implementation of a European-level initiative.”
Along with the interest and participation in the digital EURO project, the association also highlighted its priority on preserving the monetary stability with full compliance which can work with the European regulatory framework.
The association noted:
“Digital money needs to be fully trusted by citizens. To this end, the highest standards of regulatory compliance, safety, and supervision must be adhered to.”
Digital Euro or European CBDC Concept on the Go
The Italian Banking Association highlighted the importance of creating European CBDC while mentioning its role in P2P transactions.
As per the information, European Central Bank Digital Currency (CBDC) is intended for the public which may play a role of a catalyst, to increase the number of cross border P2P transactions, much economical, and affordable interests and exchange rates, which the conventional financial system is lacking.
Also, the Covid-19 has created the need for digital money which can easily operate and exchange in a contactless mode, the association stated.
European CBDC may Surpass Cryptocurrencies
The Executive Committee of the Italian Banking Association believes that the European Union (EU) CBDC may impact the command of other cryptocurrencies that are in demand at present. According to ABI, the cryptocurrencies have a high-risk profile and cannot be identified as these cryptocurrencies are issued privately by the individuals.
“Central Bank Digital Currency (CBDC) represents the instrument that more than any other can reconcile the needs of innovation, in line with the current reference framework of rules, existing instruments, and interoperability with the analog world.”
“The existence of such an instrument could at the same time reduce the attractiveness of instruments of comparable use but issued by private individuals or (in cases of complete decentralization) which cannot be identified, characterized by an intrinsically higher risk profile.”
Last year, reportedly, the association members have successfully worked on the blockchain and DLT powered project named “Spunta” for inter-banking systems. This platform aims to automate the reconciliation of inter-bank accounts.
Earlier, Koinpost reported about the Bank of Thailand’s pilot project on CBDC, which is going to start in July 2020, and would complete by this year’s end.