Adriano Azzaretti Among the institutional guests was Piero Cipollone, member of the ECB Governing Council and Chairman of the Eurosystem high-level task force for the digital euro. Cipollone, who has long insisted on the opportunity, in his opinion obligatory, of launching the European digital currency, took the opportunity to launch a real call to arms, warning the audience of the danger that the virtual European soil will transform into a land of conquest for other, not better explained but we know what he is talking about, "private payment systems", and the consequent "loss of autonomy" in the payment system.
“Alternative” digital payment systems, therefore, what a danger for banking intermediation. The same message launched in mid-February by the Deputy Director of the Bank of Italy Chiara Scotti, who in another institutional context had specified “the current instruments based on Crypto Currencies and Smart Contracts could completely eliminate every traditional intermediary and make creditors and debtors autonomous in payment transactions”. In fact, this is the case and many, including the writer, are convinced that the management of payments with Smart Contracts is the real innovation. Already operational, moreover.
Cipollone then spoke of the Digital Euro as a driver for innovation, of public-private partnerships to strive for a shared and widely used system and above all to avert external dangers that could cause the European interbank system to lose autonomy and reduce intermediation margins. Yes, but what are these dangers? In his speech, in fact, the words “Blockchain” and “Crypto currencies” never appear, only a reference to foreign Stablecoins, guilty of eroding the profits of banking companies and reintroducing credit risk. Even privacy and anonymity do not seem to be noteworthy topics for the task force, despite the digital dollar project having been abandoned precisely for these reasons, evidently more than worthy of public discussion.
In Cipollone's speech, however, the acronym DLT, Distributed Ledger Technology, is used 14 times to underline the ECB's orientation towards the creation of a dedicated European infrastructure for the digital euro. However, despite the "distributed" label, the DLT validator nodes will be controlled by the Eurosystem, it will be said for security reasons, in addition to the consensus rules, issuance and settlement, thus creating a highly centralized "permissioned" network.
The obvious opposition of the Crypto community towards the Euro CBDC project is starting to be joined by the skepticism of members of the banking system, politicians and civil society, future users of the European digital currency.
Yves Blavet, head of Open Banking at Société Générale, was among the most blunt: on X he called the project “useless, expensive and lacking tangible benefits compared to existing instruments”. Blavet also highlighted that the attractiveness of a digital currency guaranteed by the ECB could take away huge deposits from commercial banks, weakening their lending capacity to households and businesses.
The Association of German Community Banks is on the same page, according to which the adoption of a CBDC risks draining “substantial amounts of central money” from the banking system, compressing liquidity and lending capacity. From a study conducted in 2023, the Association found that if all German citizens converted 3.000 euros into Euro CBDC, only 8% of banks would remain within the liquidity limits imposed by banking regulations. Critical opinions have also been expressed by other European banking associations but not by the Italian ABI, sponsor of the project from the beginning and active partner with the ABI Lab division. Director Marco Elio Rottigni recently stated that “The digital euro has some important objectives for the community, including preserving Europe's strategic autonomy and monetary sovereignty, reducing dependence on non-European operators and promoting innovation”. In the same speech, Rottigni illustrated the results of a study conducted together with 18 banks on the costs of IT adaptation: based on the proposed European regulation, the estimated cost for Italian banks would be 880 million Euros. A significant figure that, however, does not include the cost of adapting all ATMs, changes to the merchant point of sale and offline payments without intermediaries.
The consultancy was obviously already celebrating after hearing about DLT, a topic that in the past has earned more than one bonus for achieving commercial goals, let alone now that an official budget rounded down has been announced and, above all, after director Rottigni spoke of it as "an investment that must not limit the banks' ability to innovate". The director added, however, perhaps out of conscience, that he was concerned that despite the banks' investments, other foreign platforms could dominate the digital euro.
Even in the political sphere, we were saying, doubts are starting to arise about the Digital Euro project. Fernando Navarrete, MEP, rapporteur on the subject at the European Parliament, has suggested a private alternative to the public CBDC, arguing that the market could provide more flexible pan-European solutions without imposing a “state monopoly”.
The list of critics is not complete, other banking associations, local or pan-European, have expressed doubts about the Euro CBCD but let's conclude for now by returning to the topic of privacy and anonymity. The EU Privacy Guarantors highlight, in their guidelines, the need to go beyond a rigorous anonymous threshold by implementing much more robust pseudonymization mechanisms, to avoid both indiscriminate surveillance and the flight of citizens towards unregulated tools.
And what do citizens think? It seems that the consensus does not go beyond 50% of the interviewees, as confirmed by Piero Cipollone himself in his speech. Sentiment interpreted as “growing interest” by the ECB and central banks while other subjects describe the results as “manifestation of little interest”, citing concerns about privacy and anonymity (ChainCatcher, Cointelegraph, Polytechnique-Insights)
In short, doubts about the European digital currency managed by the ECB are emerging. We will see if the European Parliament will take this into account in its final decision, expected next October. In the meantime, if the banks really want to "invest" in the project, it would be useful if they preferred real Blockchain experts to Powerpoint gurus, to ensure useful developments even outside the specific perimeter of the Euro CBDC.