Euro token, the “Italian” alternative to the digital euro arrives: how it works – Corriere.it

The digital euro not yet born. The project, for now, remains on paper, but in Italy the alternative to the CBDC (Central bank digital currency) of the European Central Bank is already ready to go. It will be called Euro Token and will be manageable by all Italian and non-Italian banks that will join the project launched by Conio, an Italian digital asset broker. Selected in the Call for proposals 2022 of the Fintech Milan Hub (the innovation center of the Bank of Italy), the project is based on an open blockchain system which banks and their customers can join, issuing digital euro tokens (stablecoins ) representative of the official currency deposited.

A token issued by banks

The goal is to create a euro token issued by commercial banks that is interoperable and interchangeable – explains a Corriere.it Christian Miccoli, founder of Conio –. Just as it issues a prepaid card, a bank will be able to issue its own electronic money tokens, which will have the value of one euro. And the more banks that join the project, the faster the system will grow. For now, a project on the border, but there are already three Italian banks that have shown interest, and they could soon increase in number – Miccoli points out -. The reason is soon said. From a banking perspective, a digital euro issued by the ECB isn’t necessarily great news, as it could lead to a reduction in bank deposits. With euro tokens, on the other hand, banks will have the opportunity to remain at the center of the financial system.

The potential benefits for consumers

From the point of view of consumers, the euro token system will be cheaper than the traditional one, as well as reducing payment times – Miccoli points out -. But the most important thing is that the euro token that will be put into circulation will be a programmable currency, so anyone can create a smart contract that will work with the digital asset. And to explain the concept well, Miccoli draws the parallel with the iPhone, which was born precisely as a programmable platform: so over time numerous applications have arisen that have made the iPhone a multifunctional tool. Smart contracts that will work with euro tokens will be exactly like applications for the iPhone.

The benefits for traders

There will also be advantages for shopkeepers, in physical and virtual space, as the euro token will lead to a drastic reduction in costs, timing and transaction processes for collections and payments – adds Miccoli -. Furthermore, thanks to smart contracts, or rather to the applications that will be born, merchants will have the possibility of pursuing customer loyalty strategies in a digital key, for example by providing for automatic refunds, concludes Miccoli.