Italian Banks Support Digital Euro | Costs & Concerns

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Italian Banks Support Digital Euro, Want to Spread Costs Over Time

The world is rapidly going digital. People now pay with their mobile phones instead of cash. The European Central Bank (ECB) is introducing something new: the digital euro. It’s a type of digital money that the central bank will issue. Now, Italian banks are supporting this project. But they want to spread the costs gradually. This news recently came out. We will look at all the details on this topic. We will discuss it in Hindi, using simple language. The digital euro will also strengthen Europe’s currency. It will reduce dependence on non-European payment providers. It will also counter the increasing use of stablecoins. Marco Elio Rottigni, General Manager of the Italian Banking Association (ABI), said, “We are in favor of the digital euro because it symbolizes digital sovereignty.” But the costs are high. Banks bear the capital expenditure. They want the costs to be spread over time.

What is the Digital Euro?

The digital euro is a Central Bank Digital Currency (CBDC). The ECB will issue it. It will function like physical cash, but in digital form. People will be able to keep it in a wallet and use it for payments. It will be secure and provide privacy. Why is the ECB introducing it? The use of cash is declining. In Europe, only 20% of transactions were done with cash in 2025. Central banks want to maintain control. They don’t want to be dependent on private companies like Visa or Mastercard. Stablecoins like Tether or USDC are growing. The digital euro will challenge them. The digital euro will also work offline. People will be able to make payments without the internet. It will be valid in the 20 countries of the Euro area. The ECB says it will strengthen monetary sovereignty.

History of the Digital Euro

Discussions about the digital euro began in 2020. The ECB started the investigation phase. In 2021, they released a report. Then came the preparation phase, which lasted two years. They are now in the next phase. The Governing Council met on October 29-30. They moved the project forward, with EU legislation expected in 2026, a pilot phase in 2027, and a launch in 2029. This is the timeline. The ECB provided a cost estimate. Eurozone banks will incur costs of 4-5.8 billion euros. This is lower than PwC’s previous estimate. In Italy, the cost is 880 million euros. This could impact bank innovation, but it will increase inclusion. Those without bank accounts will be able to use it. Uniform payments across the Euro area.

Italian Banks’ Opinion

Italian banks support the digital euro. ABI represents them. Rotigni said they are in favor. The reason is digital sovereignty. But the costs are high. Banks bear the capital expenditure. They want to spread the costs over time and they want a twin approach: CBDC and commercial bank digital currency together. Commercial currency can be developed quickly. Europe should not lag behind. Rotigny said, “Europe shouldn’t lag behind, so they want to protect private initiatives, like Vero. It’s backed by 14 European lenders.” European Parliament member Fernando Navarrete presented the draft report on October 28.

Cost Concerns of Italian banks digital euro

Cost is a major issue. The ECB says top banks will spend €152 million, and large banks €89 million. This is a downward adjustment, and banks could lose deposits. People will use the ECB wallet. Banks will take liquidity from expensive sources, up to €681 billion. Italian banks want a phased rollout of functionality, spreading costs and resources over time, focusing on essential use cases, and considering the opinions of other countries, which French and German banks oppose. They fear that millions of Europeans will use the ECB wallet, reducing deposits. Legislative progress is slow, but Italy supports it. They see sovereignty despite the disadvantages of the digital euro, which will offer several advantages: faster, cheaper, and more secure payments, privacy, and offline functionality.

Disadvantages of the Digital Euro

There are some risks: cyberattacks, privacy leaks, reduced bank deposits, and impacted bank profits. Costs are high, implementation is difficult, and will people adopt it? What about those who prefer cash? Regulation is necessary. EU legislation is pending, as is the global context, with many countries worldwide introducing CBDCs: China’s e-CNY, India’s e-rupee, and the US FedNow. Europe doesn’t want to be left behind. The digital euro will set a global standard. Consider Italy’s history: banking began in the Renaissance, and now it’s entering the digital age. The Governor of the Bank of Italy gave a speech on money and trust. It will regulate stablecoins, protect against crypto volatility, maintain central bank control, boost the economy, increase innovation, and allow fintech companies to create new products.

Italian Banking Sector of Italian banks digital euro

Italy has large banks, such as UniCredit and Intesa Sanpaolo. They participate in European initiatives, and they are undergoing digital transformation. The digital euro will fit into this. However, they need to manage costs, as well as future possibilities. The pilot program will launch in 2029, with testing by the public in 2027. Europe will become a digital leader, and banks will develop commercial currencies. Italian banks, for example, will lead in this and protect sovereignty. Despite the user impact, what will ordinary people experience? Easy payments, no fees, secure transactions, and for businesses, fast transactions and cross-border payments. Then the conclusion: Italian banks support the digital euro, they want to spread the costs, and this project will strengthen Europe. We’ve covered all the details, now let’s look to the future.