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Months ago, the ABI announced that Italian financial institutions are ready to commit to the CBDC project.
The Italian Banking Association or Associazione Bancaria Italiana (ABI) has teamed up with its ABI Lab to begin experiments with a digital euro based on distributed ledger technology (DLT). The association said more than 700 financial institutions in Italy would be participating in the research project.
The ABI revealed details on the experimentation with a digital euro on the 22nd of December. The ABI said that the project is to study the feasibility of using DLT for a digital euro. In addition, the ABI would conduct further research on other services it could offer. In a statement, the association added:
“The aim of the initiative is to proactively contribute to public debate and support banks operating in Italy as they prepare for the future.”
In addition, digital euro experiments will be divided into two segments. The first segment will evaluate the infrastructure and distribution models to determine the technical feasibility of a digital euro. Also, the other part will access the way programmability can provide use cases. The second part would highlight the difference between the European central bank digital currency (CBDC) and other electronic payment systems that are already in place.
ABI Reveals Plans to Create ECB-Backed Digital Euro
Months ago, the ABI announced that Italian financial institutions are ready to commit to the CBDC project. Coinspeaker reported that the ABI revealed plans to develop an ECB-backed digital currency for Italy. The ABI said creating a digital euro would help retain the value of the euro currency. The association also said that a digital euro would boost Italy’s financial system.
The ECB has joined five other central banks to work on the design of its functions after launch. According to a CoinDesk report, the six central banks have created a working group with the Bank of International Settlements (BIS). Each of the banks and the BIS are investigating the possible use cases for CBDC. After a thorough investigation, the seven members of the working group will now share the results of their individual experiments with one another.
Members of the working group are the central banks of Sweden, Switzerland, and Canada. Others are Japan, the UK, the European Central Bank (ECB), and the BIS. Each group member will evaluate the functions of CBDC, its technical design, cross-border interoperability and more.
Before now, the European Central Bank (ECB) president Christine Lagarde had expressed her belief in the region’s monetary authority to launch a digital version of the euro in the coming year. Specifically, the president believes the authority would launch a digital euro in the next two to four years.
Lagarde gave more comments on developing a digital euro. She expressed her views while speaking on a virtual panel with federal reserve chair Jerome Powell and Bank of England governor Andrew Bailey. She said that upon the successful launch of a digital euro, it would complement cash and not a substitute.