Italy's banks support ECB's digital euro plan, but want to spread out costs over time: Reuters

Italy's banks support the European Central Bank's effort to introduce a 'digital euro' central bank digital currency (CBDC), a top official of the Italian Banking Association (ABI) said at a press seminar, according to a recent Reuters report. 

However, the banks want to spread out the upfront capital expenditures by banks over time, as the costs are high, ABI General Manager Marco Elio Rottigni said at a press conference, per the report. Rottigni also said the banks are in favor of the proposal because "it embodies a concept of digital sovereignty." 

The comments come mere weeks after EU finance ministers, European Central Bank (ECB) president Christine Lagarde, and European Commissioner Valdis Dombrovskis reached a compromise agreement on how to proceed with the controversial proposal. Per the agreement, the finance ministers will have a say on whether or not a digital euro is issued and how much money each EU resident will be able to hold in the digital euro, in order to assuage fears of bank runs. 

The digital euro is currently projected to launch in 2029, according to the report, contingent on the EU adopting legislation next year and a pilot phase for the digital euro in 2027. Yet Rottigni told reporters that the Italian banking association favors a dual approach in order to keep pace with other jurisdictions. The United States, for example, passed its stablecoin-regulating GENIUS Act this past year. 

"We're in favour of a twin approach, a central bank digital currency and commercial bank digital currencies which may develop faster, because what Europe shouldn't do is fall behind," Rottigni said.

However, the plan has faced pushback from big banks, including the German Banking Industry Committee (the nation's top banking lobbying group) and conservative MEP Fernando Navarrete, the Financial Times recently reported. Navarrete has previously expressed concerns about adopting the digital euro, and has recently argued for a scaled-down version of the project that would see the euro used for payments without internet connection, but not for other real-time transactions. 

"The digital euro should not cater for payments between financial intermediaries, payment service providers and other market participants (that is to say wholesale payments), for which settlement systems in central bank money exist and where the use of different technologies is being further investigated by the Eurosystem," Navarrete said in a report published last week.