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    Home » Bank of Italy chief: Traditional banks remain the backbone of digital currency

    Bank of Italy chief: Traditional banks remain the backbone of digital currency

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    By liam on January 21, 2026 Companies
    Photorealistic Bank of Italy facade with a glowing euro token anchored to a secure bank vault.
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    Governor Fabio Panetta and senior Bank of Italy officials argued that commercial banks — not private stablecoins — must remain the structural anchor of digital money. The position frames stablecoins as complementary payment tools whose credibility ultimately depends on bank- and sovereign-backed liabilities.

    Panetta’s view, as presented by the Bank of Italy, rests on three linked claims: banks carry established trust; they operate under rigorous prudential oversight; and their liabilities are ultimately backed by sovereign monetary policy. From this perspective, stablecoins—despite offering transactional efficiency—are dependent on those same banking reserves and cannot substitute for them as the primary anchor of value.

    The operational takeaway for market participants: reserve composition and redemption mechanics will matter more than token design when assessing counterparty risk.

    Chiara Scotti, Vice Director of the Bank of Italy, flagged a particular risk in multi-issuance stablecoins—tokens issued under one brand across several jurisdictions. At a payments conference she warned that a multi-issuer model can magnify liquidity and legal frictions if any issuer lies outside an equivalent regulatory perimeter. Her remedy: confine multi‑issuance to jurisdictions with comparable rules to preserve on‑demand redemption at par. Traders should therefore monitor cross‑border legal frameworks as a determinant of run risk.

    Regulatory change has already tightened issuer requirements: MiCA now requires substantial reserves held in bank deposits and explicit authorisation for issuers. The Bank of Italy frames tokenised deposits—digital liabilities issued directly by banks—as a natural way to digitise money without creating new structural vulnerabilities. Central bank digital currencies, by contrast, are singled out as default‑risk‑free anchors because they are direct central bank liabilities.

    Market implications and what traders should watch

    The Bank of Italy’s stance reframes competition in digital money as a contest over institutional anchoring rather than pure technology. Industry initiatives referenced by regulators include a bank‑led euro stablecoin programme and Bancomat’s EUR‑Bank.

    Several European banks also signalled plans for a euro stablecoin in the segunda mitad de 2026. Those launches will concentrate liquidity in regulated, bank‑centred instruments — potentially lowering some counterparty risks while increasing concentration and systemic significance for participating banks.

    For derivatives desks and liquidity managers the relevant watch‑items are clear: the composition of issuer reserves, redemption assurances, cross‑jurisdictional authorisations, and any central bank interactions or backstops. Higher concentration around bank‑issued tokens could compress funding spreads in normal times but amplify spillovers in stress; leverage and OI will magnify outcomes on both sides.

    Investors and market makers are now turning attention to the second half of 2026, when multiple bank‑backed euro stablecoins — including Bancomat’s EUR‑Bank planned for december 2026 — will begin operating. Those launches will provide the immediate test of the Bank of Italy’s thesis, by revealing whether bank‑centric digital liabilities reduce fragility or simply re‑centre systemic risk within the regulated banking sector.

    Bank of Italy Chiara Scotti Fabio Panetta Featured
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    liam

    Liam writes about Web3 and decentralized finance, focusing on how protocols, applications, and governance models are used in practice. His coverage centers on real adoption, integration, and the mechanics behind decentralized systems. Market developments and regulatory context are part of his reporting when they intersect with Web3 or DeFi activity.

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