Paul Johnson Italian banks express strong support for the European Central Bank’s digital euro initiative but urge the ECB to spread out costs over several years to avoid straining financial institutions.
Italian banks back digital euro amid calls for financial relief
Italian lenders have voiced their endorsement of the European Central Bank’s digital euro project, describing it as a milestone for Europe’s digital sovereignty. However, they are urging the ECB to ensure that implementation expenses are distributed gradually to prevent excessive strain on the banking sector.
During a recent banking seminar in Florence, Marco Elio Rottigni, General Manager of the Italian Banking Association (ABI), stated that while Italy’s banking community supports the launch of the digital euro, the associated costs present a serious challenge. Rottigni emphasized that spreading the expenditure across multiple years would help financial institutions adjust without disrupting existing capital commitments.
This appeal comes at a crucial time when the European Central Bank has advanced its plans for the digital euro following a two-year exploratory phase. The project represents a significant step toward modernizing Europe’s monetary infrastructure, but it also raises questions about how the costs and operational changes will impact traditional banking models.
ECB sets a timeline for the digital euro rollout
The European Central Bank’s Governing Council recently confirmed that the digital euro will move into a structured implementation phase, with pilot programs slated for 2027 and a full-scale launch expected by 2029. This timeline depends on legislative approval from the European Union, which is anticipated in 2026.
The ECB’s vision is to create a central bank digital currency that complements physical cash, ensuring secure, accessible, and efficient digital payments across the eurozone. Policymakers argue that the digital euro would strengthen Europe’s monetary independence and reduce reliance on non-European payment platforms.
However, the journey toward adoption has not been entirely smooth. Banks in France and Germany have raised concerns about potential deposit outflows from commercial institutions once citizens begin using the ECB-backed wallet. These institutions worry that widespread use of the digital euro could reduce liquidity within the traditional banking system, potentially disrupting lending activities.
Despite such reservations, Italy’s banking industry has emerged as a key supporter of the initiative, framing it as a necessary evolution in Europe’s financial architecture.
Balancing innovation with private payment systems
European lawmakers are now considering how to integrate the digital euro without sidelining private sector innovations. Fernando Navarrete, a member of the European Parliament overseeing the legislative review, recently proposed a moderated approach that preserves space for private payment platforms like Wero a joint venture supported by 14 European banks.
This hybrid vision aligns with the stance of Italy’s banking leadership. Rottigni suggested that Europe should adopt a “twin strategy,” where the digital euro coexists with commercial bank digital currencies. Such a model would maintain the role of private banks while still enabling the ECB to provide a secure, sovereign alternative for cross-border payments.
The concept of digital sovereignty has become a central theme in the broader debate. Supporters argue that a Europe-controlled digital currency could reduce dependence on U.S.-based payment networks and global stablecoins, granting the region greater resilience in financial infrastructure.
Costs, competition, and the path forward
While enthusiasm for the digital euro is growing, Italian banks continue to stress the importance of financial fairness. The initial rollout could demand heavy investment in new systems, cybersecurity measures, and compliance frameworks. Bank executives caution that forcing these costs to be absorbed too quickly could slow adoption or discourage smaller institutions from participating.
The ECB has acknowledged these challenges and indicated its willingness to collaborate with national banking associations to ensure a smooth transition. Analysts suggest that gradual implementation may also improve public confidence, as users would have more time to understand how the digital euro operates alongside traditional banking products.
As Europe prepares for its next phase of digital transformation, Italy’s position underscores a pragmatic balance between ambition and financial discipline. The country’s endorsement of the digital euro not only signals strong alignment with the ECB’s vision but also highlights a growing consensus that the future of finance in Europe will be both digital and sovereign.
Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards.
