By Silvia Marchetti
ROME (MaceNews) – Italy is pushing for a “speedy” creation of a digital euro in a bid to strengthen the single currency, and it has now become a top post-Covid priority for the financial system, according to ruling coalition sources.
“The pandemic has accelerated the process: there’s been a significant boost in e-commerce as more consumers turn to the web to make purchases, and this can clearly be seen during lockdowns and partial lockdowns that have hit Europe since the pandemic outbreak,” said an official.
Sources said Italy is playing a leading role in the high-level task force set up in July by the European Central Bank governing council to investigate a digital euro. The task force is expected to deliver an assessment within the next 24 months. Officials hope the need to handle the pandemic effects on the economy will shorten this timeframe.
“The Eurosystem as a whole is looking into the possible characteristics of a digital single currency, including the operating and distributional infrastructures which will be used to deploy it, based on consumer needs and preferences,” said another source.
Officials noted use of digital payment instruments was rising mainly due to deep structural changes in the Italian and European economy, and that through a digital euro, consumers could benefit from digitally using the only currency totally risk-free, which is the one issued by the ECB.
“The adoption of a digital euro would have an enormous positive outcome: it would boost citizen confidence in the single currency and the financial system, while even strengthening monetary policy and financial stability across the Eurozone,” said one official.
Sources said the creation of a digital euro would never substitute, but rather “run parallel to the physical euro” and other existing electronic payment systems or to be developed in future. But it would be “more reliable than others, if anything, because backed by the single currency itself and the central bank,” added an official.
However, to fully implement a digital euro, sources warned that efforts towards greater innovation and the digital transformation of the economy must be increased. To this end, direct pandemic European aid will favor investments in key digital financial sectors.
The creation of a ‘e-euro’ will not be overnight, warned officials.
“We’re just at the beginning, in the evaluation phase,” one said. “This could be a long process, one we hope the pandemic challenges may accelerate. It must be carefully weighed whether or not to introduce thresholds to the amount of digital euros transferred by consumers for specific operations, while client protection, privacy and tools to prevent illicit activities such as money laundering are all issues that must be carefully taken into account.”
It could take up to a couple of years before consumers can eventually use a digital euro, but “it is a cornerstone of the new, post-Covid economy,” one said.