Bank of Italy Governor: Stablecoins Can Only Play a Complementary Role in the Monetary System

January 21 — Cointelegraph reports that Fabio Panetta, Governor of the Bank of Italy, has stated commercial bank money and central bank money will continue to play a key role in the monetary system, while stablecoins will only serve a complementary function. He noted stablecoins’ stability ultimately hinges on their peg to fiat currency, which limits their ability to operate independently within the financial system. Panetta added payments have become a core area of strategic competition for banks; amid a global shift of economic power toward technology and a more fragmented geopolitical landscape, digital finance is putting pressure on banks. The Bank of Italy remains cautious about stablecoins. The bank’s Deputy Governor previously warned that stablecoins issued across multiple jurisdictions (dubbed "multi-collateral stablecoins") could pose legal, operational, and financial stability risks to the European Union. As such, they need to be restricted to regions with equivalent regulatory standards, and strict reserve requirements should be imposed.