The Italian Banking Association (ABI) announced it’s started experimentation with the digital euro along with banks and ABI Lab, its fintech arm. The aim of the initiative is to contribute to public debate and support banks operating in Italy as they prepare for the future, as well as demonstrate the technical feasibility of a digital euro based on blockchain Distributed Ledger Technology (DLT).
The experimentation project is divided into two work areas: one involving the infrastructure and distribution model to analyse technical feasibility, and the second focusing on programmability to experiment with use cases that can differentiate the central bank’s digital euro from the electronic payments already available.
The first work area will be carried out with SIA and the ABI Lab Chain banking infrastructure which already has 100 active nodes distributed throughout Italy, as well as with the banks that operate within it.
The second work area will be divided into several working groups that will focus on use cases and will work in collaboration with the banks and NTT Data, PWC and Reply, which have made their resources available to the project. The initiative is open to all interested banks.
In 2020, many central banks have stepped up their study and consideration of issuing a central bank digital currency, an electronic form of central bank money distributed to citizens. The European Central Bank (ECB) is actively working on this topic.
The ECB considers it appropriate to prepare for the possible launch of a digital euro for three strategic reasons: to support the digitization of the European economy; to respond to the move away from the use of cash as a means of payment; and to respond effectively to a scenario of increased use of digital currencies issued by private entities or by central banks in other countries.