June 22, 2023

Italian Banks Participates with Bank of Italy in Whole CBDC Pilot

Bank of Italy

Bank of Italy

A consortium of 18 Italian banks, under the umbrella of the Associazione Bancaria Italiana (ABI), is participating with the Bank of Italy in the central bank digital currency (CBDC) pilot, according to Coin Geek.

The 18 Italian commercial banks are cooperating in the CBDC project, called “Project Leonidas”, which is considered one of the Bank of Italy’s attempts to leverage the use of blockchain technology for financial stability and consumer protection.

In this phase, the banks will conduct daily reconciliations to reduce the bottlenecks associated with interbank queries. They will also use a shared ledger for interbank payments, with pundits predicting the use of private ledgers over publicly distributed versions.

Earlier, the Bank of Italy had previously leveraged the use of blockchain technology to eliminate fake bank guarantees and sureties, with the participation of 30 banks in the pilot program.

Meanwhile, the Banque du France announced it ran several whole CBDC trials and would continue to do more so this year.

A March study by Juniper Research revealed that the CBDC’s total value of payments is expected to grow 260,000% in the coming decade to record $213 billion annually by 2030. According to Juniper Research, the radical change will occur because of the increasing world governments’ adaption of the CBDCs to bolster financial inclusion and tighten control over how digital payments are made.

CBDC is a digital coin issued by a central bank and pegged to the country’s fiat currency. It is not a cryptocurrency, whose value is determined by market supply and demand.

The research found that domestic payments would account for more than 90% of the total value transacted via CBDCs.

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