The Italian Banking Association (ABI) has started experimentation with a digital euro based on distributed ledger technology.
Comprised of over 700 Italian banking institutions, the ABI said Tuesday the work would examine the technical feasibility of a digital euro and further look at “new value-added services” that would become possible due to the programmable nature of the technology.
“The aim of the initiative is to proactively contribute to public debate and support banks operating in Italy as they prepare for the future,” said the ABI in a statement.
The experiments will be divided into two parts: one looking at the infrastructure and distribution model to gauge technical feasibility, and another assessing how programmability could provide use cases that differentiate a central bank digital currency from existing electronic payments systems.
In November, European Central Bank (ECB) President Christine Lagarde said she believes the region’s monetary authority will move to launch a digital version of the euro in the next two to four years.
Along with other central banks, the ECB is actively working on how the digital euro might be designed and how it might function if launched.