{"id":8106,"date":"2023-06-21T12:31:05","date_gmt":"2023-06-21T12:31:05","guid":{"rendered":"https:\/\/www.bitrabo.com\/community\/18-ltalian-banks-forge-partnership-for-blockchain-based-wholesale-cbdc-project\/"},"modified":"2023-06-21T12:32:04","modified_gmt":"2023-06-21T12:32:04","slug":"18-ltalian-banks-forge-partnership-for-blockchain-based-wholesale-cbdc-project","status":"publish","type":"post","link":"https:\/\/www.bitrabo.com\/discover\/18-ltalian-banks-forge-partnership-for-blockchain-based-wholesale-cbdc-project\/","title":{"rendered":"18 Italian Banks Collaborate on Blockchain-Based Wholesale CBDC Project"},"content":{"rendered":"\n
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A partnership between the Associazione Bancaria Italiana (ABI) and the Bank of Italy has brought together a group of banks to participate in a pilot program for a central bank digital currency (CBDC). Known as Project Leonidas<\/a>, this initiative involves 18 commercial banks utilizing blockchain technology. The main objective is to explore blockchain applications that promote financial stability and protect consumers.<\/p>\n

As part of this program, the commercial banks are using a shared ledger for interbank payments, with a preference for private ledgers over publicly distributed ones. The aim is to streamline interbank queries and improve efficiency through daily reconciliations.<\/p>\n

Interestingly, this project bears similarities to Spunta<\/a>, another blockchain-based project undertaken by Italian financial institutions, which aimed to eliminate the need for monthly reconciliations.<\/p>\n

Italian regulators seem to be leaning towards implementing atomic settlement or delivery versus payment (DvP) for wholesale CBDC issuance, rather than trigger payments. This choice reflects a desire for a more comprehensive and cohesive approach.<\/p>\n

<\/p>\n

BTCEUR Daily Chart Hovers At $26,503 | Binance TradingView<\/a><\/pre>\n
Italy\u2019s Exploration of Alternatives<\/h2>\n
Silvia Attanasio, ABI\u2019s Head of Innovation, emphasizes the importance of consolidating the asset and cash legs into a single leg for seamless operation in a wholesale CBDC based on DvP. However, critics raise concerns that this approach could fragment liquidity, sparking debates on its effectiveness.<\/p>\n
Supporters of Italy\u2019s approach point to the \u201cwaterfall feature\u201d present in the design of the European Union\u2019s digital euro. This feature automatically redistributes excess funds to relevant accounts, demonstrating its potential application in wholesale ledgers.<\/p>\n
Despite the Bank of Italy\u2019s preference for the current approach, they remain open-minded about exploring alternative solutions.<\/p>\n
In the past, the central bank successfully utilized blockchain technology to address fraudulent bank guarantees and sureties, engaging 30 banks in a pilot program.<\/p>\n
<\/span>Rising Popularity of Wholesale CBDCs<\/span><\/h2>\n
Central banks are increasingly interested in wholesale CBDCs due to their relatively easier implementation compared to retail CBDCs, which are more complex.<\/p>\n
Michelle Bowman, Governor of the United States Federal Reserve Board, recognizes the immense potential of wholesale CBDCs but highlights the challenge of envisioning a retail counterpart.<\/p>\n
Commercial banks share these concerns, expressing apprehension about potential role reductions and the impact on lending in a retail CBDC environment.<\/p>\n
The general public remains skeptical about retail CBDCs due to concerns regarding privacy and government surveillance.<\/p>\n
Experts also note the uphill battle that retail versions face in competing against established payment systems, as seen by the underwhelming adoption rates of CBDCs in Nigeria and Jamaica.<\/p>\n
<\/span>Other Central Banks Use Incentives<\/span><\/h3>\n
Central banks worldwide are grappling with the challenge of promoting CBDC adoption amidst a wide range of payment alternatives.<\/p>\n
In response, some central banks, such as the People\u2019s Bank of China (PBoC), have turned to incentives to attract users and compete with established payment platforms like Alipay and WeChat Pay.<\/p>\n
To encourage the adoption of the digital yuan, the PBoC has taken measures such as offering free digital yuan worth $21 million to Chinese citizens on accredited platforms. They have also incorporated the popular \u201cred envelope\u201d feature as part of the Chinese New Year celebrations, further incentivizing users to engage with the digital currency.<\/p>\n
Featured image from Shutterstock, chart from TradingView.com<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"
A partnership between the Associazione Bancaria Italiana (ABI) and the Bank of Italy has brought together a group of banks to participate in a pilot program for a central bank digital currency (CBDC). Known as Project Leonidas, this initiative involves 18 commercial banks utilizing blockchain technology. The main objective is to explore blockchain applications that […]<\/p>\n","protected":false},"author":1,"featured_media":8108,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"slim_seo":{"title":"18 Italian Banks Collaborate on Blockchain-Based Wholesale CBDC Project - Bitrabo","description":"A partnership between the Associazione Bancaria Italiana (ABI) and the Bank of Italy has brought together a group of banks to participate in a pilot program for"},"footnotes":""},"categories":[316],"tags":[1397,2110,521,2109,2108,924,1021,2111],"class_list":["post-8106","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-news","tag-banks","tag-blockchainbased","tag-cbdc","tag-forge","tag-ltalian","tag-partnership","tag-project","tag-wholesale"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/posts\/8106","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/comments?post=8106"}],"version-history":[{"count":0,"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/posts\/8106\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/media\/8108"}],"wp:attachment":[{"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/media?parent=8106"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/categories?post=8106"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bitrabo.com\/discover\/wp-json\/wp\/v2\/tags?post=8106"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}