Banks and the Italian Banking Association, in cooperation with ABI Lab, the banking research and innovation centre of the Italian Banking Association (ABI), have started experimentation with the digital euro.
The project will focus on enhancing the role of banks in the European Central Bank’s digital euro environment. The aim of the initiative is to proactively contribute to public debate and support banks operating in Italy as they prepare for the future.
According to the Italian Banking Association, digital euro differs from the existing electronic payments mainly due to its programmability.
The project also aims to demonstrate the technical feasibility of a digital euro based on blockchain distributed ledger technology (DLT).
This will be in addition to exploring new value-added services that the association said will become possible thanks to the currency’s programmability.
The experimentation project is divided into two work areas, the first will involve the infrastructure and distribution model to analyse technical feasibility.
This work area will be carried out in collaboration with SIA, in synergy with 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.
Meanwhile, the second area will focus on programmability to experiment with use cases that can differentiate the central bank’s digital euro from the electronic payments already available.
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 association highlighted that the initiative is open to all interested banks.
The European Central Bank explained it considers it appropriate to prepare for the possible launch of a digital euro for three strategic reasons: “to support the digitisation 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”.