Italy’s Finance Minister, Daniele Franco, has defended the concept of a digital euro, expressing his support for the European Central Bank’s (ECB) efforts to develop a central bank digital currency (CBDC). His remarks came as he sought the role of Deputy Governor at the ECB, with the current incumbent, Fabio Panetta, set to step down in May.
In an interview with Italian newspaper La Repubblica, Franco emphasized the importance of having a digital euro, stating that it would provide European citizens with a safe and convenient means of payment. He highlighted the increasing shift towards digital transactions accelerated by the COVID-19 pandemic and argued that the digital euro would address the challenges posed by private digital currencies like Bitcoin and Facebook’s Diem.
Franco’s strong endorsement of the digital euro reflects Italy’s determination to play a leading role in shaping the future of the European financial landscape. It also aligns with the European Union’s broader vision of fostering financial innovation while safeguarding monetary sovereignty. The ECB has been studying the feasibility of a digital euro since October 2020 as part of the broader effort to modernize the European payment system.
The proposed digital currency would be designed to mirror the characteristics of physical cash, offering privacy and security while ensuring its integration into the digital economy. A digital euro would allow users to make fast and secure transactions without relying on intermediaries. Additionally, it could contribute to a more inclusive financial system, enabling greater financial inclusion for individuals who may not currently have access to traditional banking services.
Franco’s support for the digital euro has put him in direct competition with Fabio Panetta, the current Deputy Governor of the ECB, who has been a staunch advocate for the digital euro and has played a pivotal role in advancing its development. Panetta, an Italian economist, has been instrumental in shaping the ECB’s digital currency plans and has been responsible for promoting the vision of a digital euro that safeguards citizens’ privacy and preserves the role of the central bank.
If Franco succeeds in his bid for the Deputy Governor role, he will have significant influence over the future of the digital euro, particularly as discussions within the ECB intensify. His appointment could potentially introduce a new perspective and policy direction for the central bank, as the digital euro inches closer to realization.
The development of a digital euro represents a crucial milestone for the EU’s ambition to maintain monetary control while harnessing digital innovations. However, its implementation requires careful consideration to strike the right balance between enhancing financial services and preserving financial stability. With the race for the Deputy Governor position heating up, the dialogue surrounding the digital euro is set to gain further momentum.
Italy’s Finance Minister, Daniele Franco, defending the digital euro signifies a growing consensus among European policymakers regarding the benefits of a central bank digital currency. The digital euro holds the potential to revolutionize the European payments landscape, enhance financial inclusion, and protect monetary sovereignty in the digital age. As the ECB moves forward with its digital currency plans, the selection of the next Deputy Governor will have a significant impact on shaping the future of this groundbreaking project.