Fabio Panetta, the Governor of the Bank of Italy and former European Central Bank (ECB) executive, has emphasized that the digital euro is essential to mitigate the risks tied to the rising use of cryptocurrencies.
In his closing remarks included in the Bank of Italy’s annual economic report released on May 30, Panetta stressed the urgency for the EU to advance its central bank digital currency (CBDC) plans. He argued that ensuring financial stability and meeting citizens’ demand for safe digital payments requires more than just regulatory efforts.
“Relying solely on rules to manage the development of crypto-assets is not enough,” Panetta said. He warned that regulation on its own cannot fully tackle the broader risks posed by cryptocurrencies—highlighting the digital euro as a more comprehensive solution.
MiCA’s Limited Influence in the EU Market
Panetta also touched on the rollout of the Markets in Crypto-Assets Regulation (MiCA), which took full effect in late 2024. He noted that despite the regulation, few electronic money tokens (EMTs) have been launched within the EU, and their use remains minimal.
In the Italian market specifically, Panetta observed a lack of enthusiasm from regulated financial institutions in issuing crypto assets. Instead, more attention has been directed toward custody and trading services. He did acknowledge that MiCA has pushed businesses to declare intentions to launch crypto services or seek official authorization.
Concerns Over Global Regulatory Gaps
While MiCA has improved investor protection within the EU to some extent, Panetta pointed out that differences in regulatory standards across countries continue to expose EU citizens to potential failures of platforms or issuers based outside the bloc.
He urged for deeper international collaboration and emphasized the EU’s responsibility to take a leadership role in shaping global regulatory standards for digital assets.
Why the Digital Euro Is the Way Forward
According to Panetta, only a digital euro issued by the central bank can provide the level of security, reliability, and efficiency required in the evolving payments ecosystem.
He stated, “What’s needed is a solution that aligns with the pace of technological progress—one that ensures secure, accessible, and efficient digital payment options while safeguarding the role of central bank money.” He emphasized that this need is exactly what drives the digital euro initiative.
Panetta’s views align with those of Piero Cipollone, a member of the ECB’s Executive Board, who has also backed the digital euro, citing the overwhelming dominance of U.S. dollar-based stablecoins, which account for 97% of the stablecoin market.
Panetta stepped down from the ECB’s Executive Board in October 2023, and Cipollone succeeded him.
His comments follow recent developments involving Tether, the issuer of the largest U.S. dollar-pegged stablecoin, USDt. Earlier in May, Tether defended its choice not to register under MiCA, with CEO Paolo Ardoino stating that MiCA poses risks, particularly to smaller banks in the EU.
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