Central banks are not ready to issue cryptocurrencies, according to the Bank of Italy

"Central banks are not ready, at least in the short term, to handle the consequences of launching cryptocurrencies," the deputy governor of the Bank of Italy said recently.

Fabio Panetta, the official in question, gave the keynote address of the Conference of the Center SUERF and BAFFI CAREFIN, at the Bocconi University. In his comments, he became the last to discuss the possibility of central banks issuing cryptoactive, including those that incorporate their own elements such as Bitcoin or some of the concepts that support Blockchain.

At the same time, Panetta began his main speech by moving the conversation away from cryptocurrencies:

Like bank notes, a cryptocurrency issued by a central bank (CBDC) would be a responsibility of the bank and would be supported by its assets, the credibility of the central bank and, ultimately, by the rule of law. Cryptoactives, on the other hand, are a liability that belongs to no one: there are no assets that support them or a clear governance structure that can guarantee trust.

Of course, according to this logic, CBDCs would continue to suffer the same volatility created by the potential for government intervention in monetary policy, a concern that has previously been linked as a cause for people seeking cryptocurrencies such as Bitcoin.

However, Panetta did point out certain advantages of cryptocurrencies issued by central banks, such as the lower costs of managing them instead of a physically distributed currency.

"Given that it would be totally dematerialized, a CBDC would have very little or no storage cost and would be a convenient way for households and businesses to maintain liquid wealth. The mattresses could be released from their function as vaults! "He jokingly affirmed.

On the other hand, it should be noted that CBDCs would be an asset "without credit and liquidity risk". Such effects, in his opinion, would not "necessarily be detrimental to banks".

Likewise, Panetta asked if the cryptocurrencies should be traceable or "designed to guarantee, as far as possible, anonymity." In this regard, he raised the ethical concern for a future in which banks can track all transactions of consumers and make decisions about the solvency of an individual based on that information.

"If the central banks decided to make an asset, the CBDC, free of credit and liquidity risk, possibly remunerated, and available to anyone at no cost, their role in the economy would fundamentally change ... Are the central banks ready to play this new paper, dealing with the concomitant complexities? In the short term, my answer is no, "said Panetta.