The Italian Banking Association (ABI) is ready to pilot a European Central Bank (ECB) central bank digital currency (CBDC).
In a statement, the ABI describes CBDC as “a programmable digital money represents an innovation able to profoundly modify the way we conceive currency and exchange.”
“This transformation can potentially deliver a great added value, in particular in terms of efficiency for both operational and support process. This is the reason why it is so important to dedicate attention and energies to develop, quickly and in collaboration with the entire ecosystem, new instruments able to primarily support the development of the Euro area,” the association said.
The ABI recognizes that the world, as well as money, is evolving and adapting to the digital lifestyles that many people live. This makes a CBDC a better fit than using paper money and coins in most cases; a digital currency can optimize the banking system as well as increase the efficiency of consumer-to-business and business-to-business transactions by reducing payment settlement times and transaction costs.
Many of the world’s governments are currently researching and developing a CBDC of their own. In a way, the research and development of a CBDC has become competitive.
Christopher Giancarlo, former chairman of the U.S. Commodity Futures Trading Commission, has released a digital dollar project whitepaper, which points out that the government that successfully creates a CBDC first will set a precedent and will most likely create the frameworks that other governments looking to create a central bank digital currency will abide by.
Which country is leading the way?
China has made the most progress in terms of getting its central bank digital currency, the DC/EP, up and running. The DC/EP has already been trialed in several pilot projects and is expected to launch sometime in the near future.
Other countries, such as those in the European Union (EU) and the United States, have directed time and energy towards the research and development of a central bank digital currency. However, the actual launch of a CBDC in the E.U. and U.S. seems to be far off, or at the very least, does not have an estimated release date.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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