Latest news with #digitalEuro
Crypto Insight
12 hours ago
- Business
- Crypto Insight
Digital euro, not MiCA, key to managing crypto risks: Bank of Italy chief
Former European Central Bank (ECB) official and Governor of the Bank of Italy, Fabio Panetta, touted the digital euro as a key tool for controlling the risks of increasing cryptocurrency adoption. The Bank of Italy, on May 30, released an annual report with the governor's concluding remarks on the state of the economy. Panetta said the European Union must move forward with the central bank digital currency (CBDC) project to maintain financial stability and meet demand for secure digital payments. 'We would be remiss to think that the evolution of crypto-assets can be controlled only through rules and restrictions,' Panetta said, warning that crypto regulation alone cannot address the systemic risks posed by crypto, and that the digital euro would be key to addressing them. MiCA's limited impact on EU stablecoins Panetta also addressed the impact of the EU's crypto regulatory framework, the Markets in Crypto-Assets Regulation (MiCA), which entered into full force in late 2024. 'Since MiCAR came into force, only some EMT [electronic money token] stablecoins have been issued in the EU and their circulation is limited so far,' the governor stated. He also said MiCA has not fueled any significant stablecoin developments in Italy: 'In Italy, there has so far been little interest in the issuance of crypto-assets by supervised intermediaries and other operators, while a growing focus on custodial and trading services has been observed.' MiCA has encouraged businesses to report if they plan to launch crypto asset services or intend to apply for authorization to do so, he added. Risks stemming from foreign platforms While offering some protection to European investors, MiCA has not fully safeguarded savers from the risks associated with 'heterogeneity in regulatory approaches' globally, Panetta argued. 'EU citizens might be exposed to failures of platforms or issuers based in other jurisdictions that lack adequate controls or the necessary transparency and operational safeguards,' he said. He called for stronger international cooperation and urged the EU to lead on establishing global regulatory standards. Digital euro is ultimately the right tool Panetta said that only a digital euro, backed by the central bank, could offer the necessary trust and functionality in a changing payment landscape: 'What is needed is a response that matches the ongoing technological transformation, one capable of meeting the demand for secure, efficient, and accessible digital payment instruments, all while preserving the role of central bank money,' he said. 'The digital euro project stems precisely from this need.' Panetta's remarks echo the agenda promoted by ECB Executive Board member Piero Cipollone, who has advocated for the launch of a digital euro, citing the growing popularity of US dollar stablecoins, which now make up 97% of the entire stablecoin market. Previously a member of the ECB's Executive Board, Panetta resigned in October 2023, with his position subsequently filled by Cipollone. Panetta's report came weeks after Tether, the issuer of the world's largest US dollar-pegged stablecoin, USDt, defended its decision to skip MiCA registration for USDT in early May. 'MiCA license is very dangerous when it comes to stablecoins, and I believe that is even more dangerous for the small, medium banking system in Europe,' Tether CEO Paolo Ardoino said at the time. Source:
Finextra
3 days ago
- Business
- Finextra
EBAday 2025: Digital euro emerging as a transformative force
At EBAday 2025, two expert panels explored how the digital euro and real-time data can transform finance and beyond — shaping future digital money, guiding PSPs, and helping corporates and SMEs enhance liquidity through automation. 0 This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. Reinventing money In the first panel, panellists discussed how the digital euro is emerging as a transformative force, raising key questions around future requirements and the broader benefits. Speakers Andrea Meier, DZ Bank; Bruno Mellado, BNP Paribas; Daniel McLean, European Central Bank; Nils Beier, Accenture, and Ville Sointu, Nordea Bank, were moderated by Petia Niederländer, Oesterreichische Nationalbank. Niederländer opened by asking Beier, whether European banks are prepared given developments in the past 12 months - such as tariff policies, stablecoins, tokenised deposits, and innovations such as digital wallets and AI. Beier identified three areas of change: digital assets, international payments, and European retail payments, noting that while banks are experimenting, 'what we see as missing is a joint public private vision strategy that lays the foundation for the industry to move on, supported by the public sector.' Following the importance of public private partnerships, Niederländer asked McLean for an update on the digital euro project. McLean outlined two phases: first, investigating the digital euro's purpose and use cases; the second, nearly completed stage, involves preparing the technology, infrastructure, and key players 'so when, and we hope the legislature, will give us a big thumbs up to go ahead with the digital Euro, we'll be ready to implement it now' explained McLean. Sointu commenting on banks' technology readiness for the digital euro, stressed the need for customer-facing solutions, 'if you look at the definition of a bank as an intermediary for digital euro, we have to take care of all customer facing responsibilities, including changes in every customer touch point, not accounting the different form factors being discussed in terms of distribution, including physical cards and all possible digital form factors.' Meier mentioned focusing on delivering solutions for corporate customers now, rather than waiting for international solutions. 'We need to deliver our customer needs now, we are not focusing on deliverables in three or four years. Therefore we see use cases for digital money for our corporate customers, but the use cases now are in delivering money and payment on DLT base.' Mellado added how there is a need to 'make these account ledgers from central banks, from banks, so they speak to each other in a much more efficient and atomic way. That's the key battle we have to fight.' Niederländer then posed a question around the biggest threat to European sovereignty in payments and financial transactions. Meier discussed the importance of international cooperation and the role of the digital euro in fostering private solutions, with Sointu emphasising the role of the digital euro in solving interoperability issues. The conversation then turned to the benefits of the digital euro, and the role of the project in supporting innovation. Meier outlined the ECB's efforts to facilitate innovation through workstreams with market participants, with McLean reiterating the ECB's commitment to facilitating innovation. Mellado mentioned the importance of addressing liquidity costs and the potential for the digital euro to improve international payments, with Beier highlighting the potential for B2B use cases. Concluding the panel, Niederländer emphasised the need for stronger European cooperation between public and private sectors to effectively advance innovation. Liquidity management and real-time payments The following panel, moderated by Joost Bergen, examined how real-time data and automation can enhance liquidity for corporates and SMEs, and what's needed to achieve real-time cashflow and Treasury as a Service. Speakers included: Alexandre Eclapier, J.P. Morgan; Gauthier Jonckheere, BNY; Ritu Sehgal, Natwest; Tarun Kishore Sonwalkar, Infosys Finacle, and Wim Grosemans, BNP Paribas. The moderator, Joost Bergen, opened by asking about the difference between real-time payments and real-time data. Sehgal explained the distinction, emphasising the complexity of the cash cycle, 'it's the whole of the cash cycle that means receiving payments and sending payments in real time. They're at quite different evolution stages, so the adoption level for one over the other depends on where the corporation is in the life cycle.' On the need for reliable and quality data, Grosemans commented 'real time, data on demand, is key but the question is, where does that have to come from? that's where we also see an important task from our customers, to work further on strategies to ensure consolidation.' Eclapier then summarised how real-time data and payments are seen as essential for better liquidity management and investment opportunities, focusing on three main pillars of liquidity management: 'visibility is about the data you can receive in real time. The control is where the payment fits in, how you move money from one account to another, which can happen on a real time basis. Once you have a combination of both, that's when you can optimise, focusing on the investment opportunities, reducing the boring costs.' Jonckheere mentioned the increasing demand for real-time data driven by regulatory requirements and data analytics. 'Real time data is a big focus for clients to enable their underlying corporate proposition, this is starting to translate into the benefits real time payment could bring into certain use cases', explained Jonckheere. The conversation then turned to the need for better data analytics and AI to support real-time decision-making. Sonwalkar noted 'It's still early days in terms of whether it will be a fully automated AI predictive Treasury as a service on Cloud, available for everybody. That's probably something that on the horizon we are all looking forward to as it reduces the total infrastructure cost and automates a lot of things. Today, what we see in the market is more modular, connected, and integrated.' The potential for Treasury as a Service to support better liquidity management and decision-making is acknowledged, with Bergen summarising the key points discussed, emphasising the importance of liquidity in payments.
CNA
15-05-2025
- Business
- CNA
ECB hopes to have political deal on digital euro by early 2026
FRANKFURT :The European Central Bank hopes to have all the political decisions in place by early next year to issue a digital euro and would then need two to three years to launch the currency, ECB board member Piero Cipollone said on Thursday. The ECB has been working on a digital version of the euro for years but progress has been slower than expected, mostly because legislation is still not in place to allow the bank to proceed. Financial upheaval in the aftermath of Donald Trump's election as the U.S. President has increased the urgency, however, as Europe relies on big U.S. firms for most digital payments, a potential financial vulnerability. "I hope to have everything done by the beginning of next year, very early next year," Cipollone told a conference when asked about the timing of the legal framework. "We need the legislation in place, and from that, two to three years will be enough to launch the digital euro." Unlike when they make a card payment by the likes of Visa or Mastercard, consumers paying with a digital would have a direct claim on the central bank and their funds would be similar in function and security as cash. It would allow customers to make direct payments both in online and offline formats. Cipollone said a key hurdle is getting a political agreement from EU member states but that could be reached before the summer. Work by the European Parliament could take somewhat longer, he added. When asked if Trump could accelerate the process, French central bank chief Francois Villeroy de Galhau, speaking at the same event, said it enhanced the ECB's determination.
Finextra
08-05-2025
- Business
- Finextra
Fluency to test offline and programmable payments for ECB's digital euro project
The European Central Bank has selected UK-based deep tech company Fluency to run intiatives in programmable and offline payments for the digital euro project. 0 This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. Fluency will conduct experimentations in conditional payments — a breakthrough capability that allows digital euros to be programmed to move only when specific conditions are met. The firm says it will also contribute its patented software-based offline payments technology, enabling secure digital euro transactions without internet connectivity or reliance on specialised hardware. The ECB in March opened an innovation platform where nearly 70 private sector market participants can explore functionalities and use cases. This followed a call for expressions of interest in innovation partnerships for the CBDC, including offline and conditional payments. 'We're proud to support the ECB in shaping a digital euro that is programmable, inclusive, and sovereign by design,' says Inga Mullins, CEO of Fluency. 'Fluency's architecture is built to connect digital money with real-world usability — whether through offline execution or intelligent conditional logic.' Fluency's proprietary Aureum platform enables atomic settlement, programmable transfers, and real-time interoperability across CBDCs, RTGS systems, stablecoins and tokenized assets. The ECB appointment follows Fluency's recent selection to the AI Consortium led by the Bank of England and the Financial Conduct Authority.
