Bank of Italy Governor Fabio Panetta has asserted that commercial bank money and central bank money will continue to be the foundation of the monetary system, with stablecoins playing only a supplementary role. Panetta made these remarks at a recent financial technology conference.

Panetta explained that the stability of stablecoins depends on their peg to fiat currencies, which limits their capacity to operate independently within the financial system. He pointed out that stablecoins function as digital representations of existing money, tied to the credibility and policies of central banks. This dependency prevents them from serving as a primary unit of account or a standalone store of value.

Panetta's perspective aligns with observations from other major financial institutions, such as the Bank for International Settlements (BIS), which has published research on the constraints of asset-backed crypto assets. He also highlighted the strategic importance of payments for banks, identifying them as a core competitive battleground as technology and politics reshape the global economy.

The Governor's comments reflect a broader trend among European policymakers who view the digitalization of money as a long-term structural shift driven by banks and central institutions, rather than privately issued crypto assets. The European Central Bank (ECB) is currently working on introducing a digital euro, which would be a digital version of cash issued and guaranteed by the central bank. The digital euro is intended to complement, not replace, euro banknotes and coins, and provide an additional payment option for citizens of the Eurozone. The ECB's goal is to be ready for a potential issuance of the digital euro by 2029.

While Italy's banks support the ECB's digital euro plan, they also seek to distribute the high upfront capital expenditures over time. They also favor a dual approach that includes both a central bank digital currency and commercial bank digital currencies.

The Bank of Italy has been actively involved in the Eurosystem's work to consider the introduction of a digital euro. The digital euro would not be a cryptocurrency, as it would be backed by a central bank with a stable face value and legal tender status. It would also not be an investment instrument but rather a means of payment for the benefit of the economy and society.

In contrast to the EU's cautious approach, the United States is expected to take a more free-market approach to crypto regulation. Despite regulatory differences, the Bank of Italy recognizes the need to pay attention to the rise in ownership and use of crypto-assets.