Italy has decided that at this present time it has no inclination to embark on a CBDC, according to the deputy governor Fabio Panetta of the Bank of Italy in a statement on Thursday, reported Coindesk.
During a keynote address to the SUERF and BAFFI CAREFIN Centre Conference held at Bocconi University, he focussed his attention on the volatility of cryptocurrency, rather than its advantages, although he did make some positive reference to CBDCs low costs when he suggested amusingly:
“Since it would be completely dematerialized, a CBDC would have very few or no storage costs and would be a convenient way for households and firms to keep liquid wealth. Mattresses could be freed from their role of vaults!”
His main concerns were similar to many other central banks globally who are going through the same process of investigating the principal of a CBDC versus crypto assets.
“In fact – just like banknotes – a [central bank digital currency (CBDC)] would be a liability of the central bank and would be backed by its assets. It would be supported by the credibility of the central bank and ultimately, by the rule of law. Crypto-assets, on the other hand, are a liability belonging to nobody: there is no asset that backs them up and no clear governance structure that can guarantee trust… the value of a CBDC would not suffer from the excessive volatility that affects crypto-assets.”
He also focussed on an ethical issue that could arrive from bank’s intervention in regard to the traceability and anonymity of consumer transactions, suggesting banks might be able to trace all consumer transactions and make decisions on an individual’s creditworthiness based on such information.
He spoke of other complexities which might arrive from offering a CBDC which the bank may not be prepared for at this time, although he did hint that “a world with digital cash” was worthy of its current research, but the time for action hadn’t arrived yet.
“If central banks decided to make an asset – the CBDC – free of credit and liquidity risk, possibly remunerated, and available to anybody at no cost, their role in the economy would fundamentally change… Are central banks ready to play this new role and to deal with the attendant complexities? In the short term, my answer is no.”
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