Italy supports the European Central Bank's (ECB) digital euro project, but sets its conditions. The transalpine banks, while welcoming this digital sovereignty initiative, are asking for a financial effort spread over time. Faced with heavy investments, the Italian banking sector wants to avoid a budgetary shock. Will this position resonate with other European countries?
In brief
- Italian banks approve the ECB's digital euro project while calling for implementation costs to be spread over several years.
- Marco Elio Rottigni, general director of the Italian Banking Association, defends the concept of European “digital sovereignty”.
- The project faces resistance from certain French and German banks who fear a flight of bank deposits.
- Italy is calling for a “dual approach” combining the digital euro and digital currencies issued by commercial banks.
Italy between enthusiasm and financial pragmatism
The Italian Banking Association (ABI) expressed its support for the digital euro project at a press seminar in Florence on Friday. Marco Elio Rottigni, its general director, welcomed this initiative which he considers to be a “concept of digital sovereignty”. However, behind this enthusiasm lies a major concern: the financial weight of the project.
“ The costs of the project are, however, very high compared to the investment expenses that the banks must bear ” said Rottigni. Italian establishments are therefore demanding that these costs be spread over time.
This request comes as the European banking sector faces multiple technological and regulatory challenges. Banks already need to invest heavily in cybersecurity, regulatory compliance and infrastructure modernization.
There Italian position contrasts with that of certain French and German banks. The latter are showing more outspoken resistance, fearing that a digital wallet supported by the ECB will drain deposits from commercial establishments. This concern is not trivial: a massive transfer of deposits to the digital euro could weaken the traditional economic model of banks.
Rottigni proposes a pragmatic solution: adopt a “dual approach”. This strategy would combine the ECB's digital euro with digital currencies issued by commercial banks.
“ What Europe must not do is fall behind “, he insisted. This declaration echoes European ambitions in the face of international competition, particularly Chinese and American, in the field of digital currencies.
An ambitious schedule despite obstacles
The ECB Governing Council approved the move to the next phase of the project at the end of October, after two years of preparation.
A pilot phase is due to begin in 2027, with full deployment provisionally planned for 2029. This timetable, however, remains conditional on the adoption of European legislation in 2026, a process which promises to be complex and politically sensitive.
The ECB has already taken concrete steps. Last month, it finalized framework agreements with seven technology providers, including fraud detection specialist Feedzai and security firm Giesecke+Devrient.
These partnerships aim to develop innovative features, such as “alias search”. This feature will allow users to make payments without knowing the technical details of the recipient or their offline payment capabilities.
MEP Fernando Navarrete, who is leading the parliamentary review, recently presented a draft report advocating a slimmed-down version of the digital euro. The objective: to protect private payment systems like Wero, launched by fourteen European banks. This approach demonstrates the desire to find a balance between public innovation and preservation of the private ecosystem.
Beyond Europe, 137 countries and monetary unions representing 98% of global GDP are currently exploring the creation of a central bank digital currency. This global race illustrates the strategic challenge of CBDCs.
Christine Lagarde, President of the ECB, continues to defend the project as a “symbol of confidence” and a tool of European financial sovereignty, despite criticism of the risks of surveillance and centralization.
The digital euro is at a strategic crossroads. If Italy shows the way to conditional support, the project remains faced with major financial, political and societal resistance. The ECB will have to convince not only commercial banks, but also European citizens.
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