ABI Calls for Gradual Rollout

Italy’s banking sector has voiced support for the European Central Bank’s plan to launch a digital euro, but warned that the project’s costs should be distributed over several years to avoid straining bank finances. Marco Elio Rottigni, general manager of the Italian Banking Association (ABI), said the initiative represents “a concept of digital sovereignty” for Europe but noted that the capital expenditure required is “very high.”

“Costs for the project, however, are very high in the context of the capital expenditure banks must sustain. They could be spread over time,” Rottigni told reporters at a press seminar in Florence, according to Reuters.

The call comes as the ECB pushes ahead with its central bank digital currency (CBDC) plans amid mixed reactions from the continent’s lenders. Several German and French institutions have expressed concern that a retail version of the digital euro could divert deposits away from commercial banks and into ECB-controlled wallets.

Investor Takeaway

Italian banks back the ECB’s digital euro for sovereignty reasons but want a slower rollout to absorb costs, underscoring the tension between innovation and bank funding models.

Timeline and Policy Context

At its meeting in Florence on Oct. 29–30, the ECB’s Governing Council approved the project’s next stage after a two-year preparatory phase. A pilot program is due in 2027, with a potential full launch in 2029 if the European Union passes the required legislation next year. Finance ministers have also agreed to retain a say over the size of individual digital euro holdings to prevent large-scale deposit shifts.

The initiative comes as 137 countries and currency unions — representing 98% of global GDP — explore or develop their own CBDCs, according to the CBDC Tracker. In Europe, the digital euro is positioned as a way to reduce reliance on private payment networks and to strengthen the bloc’s control over cross-border settlement systems.

Pushback From Lawmakers and Banks

Some policymakers and lenders remain skeptical. European Parliament member Fernando Navarrete, who is leading the legislature’s review of the proposal, has circulated a draft report calling for a pared-down version of the digital euro to protect private payment initiatives such as Wero — a platform developed by 14 European banks.

“The digital euro should not cater for payments between financial intermediaries, payment service providers and other market participants… for which settlement systems in central bank money already exist,” Navarrete wrote in the report published last week. His stance reflects growing unease over whether the ECB’s retail design could crowd out commercial solutions or limit their profitability.

Banking associations in Germany and France have also warned that the digital euro, if implemented as a direct consumer wallet, could lead to “disintermediation” in deposit markets and raise funding costs for banks. Rottigni, by contrast, argued for what he called a “twin approach,” combining the ECB’s digital euro with commercial bank-issued digital currencies to maintain competition and speed of development. “What Europe shouldn’t do is fall behind,” he said.

Investor Takeaway

The debate highlights a fault line between public digital money and private payment systems. How the ECB balances the two will determine whether banks view the project as a threat or a partner.

Tech Partnerships and Implementation

To prepare for the next stage, the ECB has signed framework agreements with seven technology firms covering fraud prevention, data security, and payment infrastructure. Among them are Portugal-based fraud analytics company Feedzai and German security specialist Giesecke+Devrient (G+D). The contracts include the development of “alias lookup” features — allowing payments without knowing the recipient’s service provider — and offline transaction capabilities.

Officials familiar with the project say the ECB’s goal is to ensure interoperability across all EU member states, creating a unified payments layer that can function even if commercial systems are disrupted. While technical progress has accelerated, the political debate over cost, scope, and privacy protections continues to divide policymakers ahead of the legislative vote in 2026.

For Italy’s banks, the central issue remains financial feasibility. Spreading implementation costs over multiple years could allow lenders to modernize gradually while keeping the ECB’s broader digital agenda intact. Whether that compromise is adopted will depend on negotiations between the bloc’s central bankers and lawmakers in the months ahead.