Italy CBDC Tracker

Italy is in the pilot phase of its central bank digital currency (CBDC) development. The Bank of Italy has been actively working internally, with the European Central Bank, and with other central banks to research and build different CBDC designs.

Note: This page is dedicated to the work done by the government in Italy. However, Italy is a member of the European Union and Eurozone. If the European Central Bank launches a CBDC (referred to as a digital euro), then this page will be changed to reflect that. Until then, the Eurozone page has notes about the development of the digital euro.

CBDC History and Development

In the Bank of Italy’s 2020 annual report, Bank of Italy governor Ignazio Visco shared that “the Bank of Italy is involved in the Eurosystem in analysing and testing possible solutions for the introduction of a digital euro. This is a development that must be defined carefully in terms of both timing and modes, also based on the outcome of the recently concluded public consultation. The use of the TIPS platform set up by the Bank on behalf of the Eurosystem to settle instant payments in the euro area could be a fundamental part of this.”

In 2021, the Bank of Italy published a report discussing technical design choices for the digital euro, or CBDC for the Eurozone. The report notes that the Bank of Italy piloted a project referred to as “itCoin.” The project was a platform based on Bitcoin’s code where the biggest differences were that the issuance of currency was controlled by the European Central Bank, the code was controlled and operated by the European Central Bank, and both block latency and transaction volume were increased. The Bank of Italy also explored the idea of expanding the TIPS system to take on CBDC-like capabilities.

In the Bank of Italy’s 2021 annual report, Bank of Italy governor Ignazio Visco shared that “the Bank of Italy is involved in the work being carried out at Eurosystem level to consider the introduction of a digital euro.” Visco added that “A digital currency issued by a central bank would represent an anchor for the public’s trust in money, which would act as a complement to cash and the existing electronic means of payment as well as to the development of reliable private-sector digital instruments.”

In 2022, the Bank of Italy issued a call for proposals concerning the use of distributed ledger technology in banking and finance “with particular reference to solutions capable of ensuring the final settlement of payments in central bank money.” While it should be taken with a grain of salt, this description could be reasonably be inferred to be taken as describing a CBDC. That is especially the case because “Project Leonidas” was one of the selected proposals and was described as a wholesale CBDC.

In the Bank of Italy’s 2022 annual report, Bank of Italy governor Ignazio Visco wrote, “This area also includes the challenge posed to the Eurosystem by the possible introduction of a digital euro, which we are actively helping to develop. The ECB Governing Council will decide this autumn whether and how to proceed to the phase of defining the required technical and commercial solutions. A final decision on going ahead with a digital currency will in any case require the adoption of the necessary regulatory framework by the European Parliament and the Council of the European Union.”

From July 2023 to December 2023, the Bank of Italy supported the development of Project Leonidas. The project was run, however, by the Italian Banking Association—a trade association—in collaboration with R3, NTT DATA, and 17 banks. The Italian Banking Association published an update on Project Leonidas in 2024. The six-month pilot tested how distributed ledger technology could be used to settle simulated transactions with a wholesale CBDC.

In the Bank of Italy’s 2023 annual report, Bank of Italy governor Fabio Panetta wrote, “Despite the issues that I have described, I would like to stress the progress that Banca d’Italia and the Eurosystem are making in providing cutting-edge infrastructures for payment, securities and collateral transactions to the European market. Our goal is to ensure its security and efficiency using TARGET services and—looking ahead—through a digital euro and joint collateral management throughout the monetary union.”

In the Bank of Italy’s 2024 annual report, Bank of Italy governor Fabio Panetta wrote that a CBDC is needed as a response to the rise of cryptocurrency. Specifically, Panetta wrote, “What is needed is a response that matches the ongoing technological transformation, one capable of meeting the demand for secure, efficient and accessible digital payment instruments, all while preserving the role of central bank money. The digital euro project stems precisely from this need.”

### Human Rights and Civil Liberties Concerns

Italy is generally rated favorably, but there have been reports of issues around the treatment of human rights and civil liberties. However, most of those issues do not tie directly into the issuance or use of a CBDC. Furthermore, it must be said that the ability of the Italian government to abuse a CBDC directly is debatable because the CBDC that would be used in Italy would be provided by the European Central Bank—representing the European Union. With that said, it’s important to recognize that the creation of a CBDC could open the door to risks to financial privacy and financial freedom.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.