ROME - In the rapidly changing conversation about digital money, the governor of the Bankof Italy has clearly stated that it is only through stablecoins that trust in the current financial system can be upheld and not by stablecoins. During a recent financial policy event, Fabio Panetta, who is the Governor at Bank of Italy, emphasized that the traditional banks are very important as they help in tying down digital money on some essential values like safety, credibility among others.
Panetta
has refuted claims that privately issued stablecoins could take over from banks
as the basis for digital payments. Although he admitted that there is an
evolution in finance sector, he cautioned that stablecoins depend on confidence
which may disappear instantly under pressure. On the other hand, banks operate
under strict regulatory frameworks meant to ensure customer protection and
maintain economic stability.
The head
went on to say that just like in traditional currencies, digital money also
derives its trust from similar kinds of institutions. He added that banks are
under close watch, they have been mandated to keep some capital aside and they
can easily access central bank liquidity. Even when those tokens are said to be
fully backed or low risk, such safeguards are not applicable to-stablecoin
issuers in the same manner.
These
comments were made at a time when stablecoins are becoming popular worldwide,
particularly in crypto trading and cross-border transactions. Nevertheless,
authorities across Europe and America have raised issues several times
concerning transparency, quality of reserves as well as likelihood of sudden
run-on-confidence falling out. The recent history of the market has shown how
quickly supposedly stable digital assets can lose their peg, Panetta observed.
The
Italian banker also related his speech to the wider movement towards
central-bank digital currencies. He argued that a digital euro underwritten by
the central banking system would offer a secure option for online transactions
without compromising control over national currency. According to him, public
money in its digital form should serve as the anchor with banks left to
distribute and manage it within the prevailing financial structure.
Panetta stressed
that innovation should not be used as an excuse to ignore or sideline banks.
Instead, he claimed that banks adapt with technology by integrating digital
tools while keeping intact trust established for many years. Although
stablecoins may have their place, they are no substitute for-a regulated
banking system according to him.
This
position mirrors a broader regulatory sentiment in Europe where policymakers
advocate for increased oversight of crypto assets and reinforce the role played
by traditional institutions. As digital finance continues its rapid expansion,
Panetta’s message is unequivocal: in matters concerning trust in digital money,
banks remain the cornerstone of the system.