Another European country launches testing of state-owned cryptocurrency

The Central Bank of Italy and the Association of Italian Bankers (ABI) have announced the launch of the Project Leonidas pilot program to test options for the wholesale supply of the state digital currency. The initiative will involve 18 commercial banks in the country that are considering the use of blockchain technology in their operations.

The main objective of the pilot project is to explore the potential of using blockchain for CBDC transactions, simplify interbank requests, and increase the efficiency of document reconciliation.

As part of the testing of CBDC wholesale delivery capabilities, commercial banks plan to use a general Ledger of interbank payments formed on the basis of private registries. «By launching the Leonidas project, the Italian banking industry aims to harness the potential of blockchain technology to ensure financial stability and consumer protection. By working together, we will create the groundwork for a future in which CBDCs play a prominent role in the evolution of the financial landscape,» said Silvia Attanasio, Head of Innovation at the association.

However, not all EU member states follow Italy’s example. Slovakia is even planning to change its legislation to avoid the launch of the digital euro in its country. Slovak analysts studying the topic of the EU’s unified cryptocurrency fear that the issue of CBDC will jeopardize the privacy of citizens' personal data. «The circulation of the digital euro will be under the control of a single government agency, so officials will be able to track all transactions without any problems,» the experts said.

As a reminder, last week it became known about the first regulatory rules related to the digital euro. It is emphasized that when using CBDC offline, the level of confidentiality of the digital euro should be the same as when withdrawing funds from an ATM. Neither the European Central Bank nor payment service providers will have access to personal data during transactions.

The digital euro cannot be credited with interest, and the ECB will have the right to introduce additional control measures. For individuals, it is planned to introduce a storage limit of a maximum of € 3,000 (about $ 3,250) to ensure that they are used primarily for everyday payments.