The experiments aim to examine a digital euro’s technical feasibility as well as its “programmability” as a coin separate from a central bank digital currency, (CBDC) according to CoinDesk.
The digital currency in trial is supported by distributed ledger technology (DLT), and the two-part experiments also aim to examine the use cases of a DLT-enabled currency.
“The aim of the initiative is to proactively contribute to public debate and support banks operating in Italy as they prepare for the future,” CoinDesk reported, citing a statement from the ABI, an organization that includes over 700 banking institutions in Italy.
Any bank can participate in the digital currency initiative, Ledger Insights reported. Under the ABI’s Project Spunta, over 100 banks in Italy are already using blockchain nodes through R3’s Corda to support automated account reconciliation of interbank transactions.
NTT Data, Project Spunta’s developer, and payment system provider SIA, are participating in the research experiment, Ledger Insights reported.
The European Central Bank has been a vocal supporter of a digital euro, advocating for a CBDC. Christine Lagarde, the ECB’s president, stated last month that a European CBDC could be out in “two to four years,” PYMNTS reported.
“By providing digital payments, the Eurosystem could ensure that European citizens have access to payments at the technological frontier,” said the ECB, according to a separate PYMNTS report. “This would preserve the global reputation of the euro.”
However, many officials believe a digital currency would have to be carefully regulated, and perhaps only issued by the ECB as a CBDC.