Commercial banks and central banks will remain the backbone of the future monetary system even as money becomes fully digital, according to Fabio Panetta, governor of the Bank of Italy. Speaking this week to Italy’s banking association, Panetta argued that stablecoins may have a role in payments but cannot function as a true anchor of digital money because their stability relies entirely on traditional currencies.
His remarks underline a consistent message from European policymakers that the digital transformation of money will be led by regulated financial institutions, not privately issued crypto assets.
Digital bank money to evolve alongside central bank money
Panetta said that commercial bank money is likely to become fully digital over time, coexisting with central bank money as the main pillars of the monetary system. While the form of money may change, he stressed that the institutions backing it will remain largely the same.
According to a Reuters report on his speech, Panetta told bankers that both central bank money and digital commercial bank money will continue to provide trust and stability. In contrast, stablecoins can only serve a complementary function rather than act as an independent monetary foundation.
He noted that stablecoins are not self standing instruments. Their value depends on a peg to fiat currencies such as the euro or the dollar, which limits their ability to operate independently within the financial system.
Why stablecoins cannot replace banks
Panetta’s comments reflect a broader skepticism among European central bankers about the long term role of stablecoins. While these tokens are often promoted as efficient payment tools, Panetta emphasized that their credibility ultimately comes from the traditional financial system they reference.
Because stablecoins rely on reserves held in fiat currencies, their stability is only as strong as the underlying assets and regulatory frameworks supporting them. This dependency, Panetta argued, prevents stablecoins from replacing bank money as the core of the monetary system.
Instead, he positioned them as add ons that may improve certain payment functions but do not change the fundamental structure of money creation and trust.
Payments become strategic in a shifting global order
Beyond digital currencies, Panetta highlighted how payments and financial infrastructure have become strategically important for banks. He described payments as a central competitive battleground as technology advances and global politics increasingly shape economic outcomes.
Citing the Italian news agency ANSA, Panetta said that traditional economic drivers such as investment flows, trade patterns and interest rates are now more influenced by political decisions than by market forces alone.
He also pointed to a shift in the global economy’s center of gravity, saying technological power now plays a decisive role in shaping economic influence. Unlike past industrial revolutions, this transformation is unfolding in a less cooperative international environment, marked by fragmentation and geopolitical tension.
In this context, digital finance is no longer just a question of efficiency or innovation. Panetta framed it as a pressure point for banks navigating a world where technology, regulation and geopolitics are increasingly intertwined.
Europe’s long term view on digital money
Panetta’s stance fits squarely within the broader European approach to digital money. Policymakers across the region have repeatedly described digitalization as a long term structural trend that should be guided by banks and public institutions rather than private crypto issuers.
The European Central Bank and national central banks have argued that maintaining monetary sovereignty requires strong oversight of digital payment systems and currency like instruments. This includes close scrutiny of stablecoins, especially those with cross border reach.
While acknowledging innovation, European officials have consistently emphasized that trust, regulation and institutional backing remain essential to any form of widely used digital money.
Caution over cross border stablecoins
The Bank of Italy has previously raised concerns about the risks posed by certain types of stablecoins. In September 2025, Vice Director Chiara Scotti warned that so called multi issuance stablecoins could create legal and financial stability challenges for the European Union.
These tokens, which are issued across multiple jurisdictions under a single brand, could weaken regulatory oversight if they operate in countries with uneven standards. Scotti said such stablecoins should be limited to jurisdictions with equivalent regulatory regimes and subject to strict rules on reserves and redemption.
At the same time, she acknowledged that stablecoins can reduce transaction costs and improve payment efficiency, particularly in cross border transactions. Her comments reflected a balanced view that recognizes potential benefits while stressing the need for strong safeguards.
Banks remain central despite innovation
Taken together, the remarks from Panetta and other Bank of Italy officials suggest that Europe sees digital finance as an evolution rather than a disruption of the existing monetary order. Innovation is welcome, but only within frameworks that preserve financial stability and public trust.
For European policymakers, banks and central institutions are expected to remain at the core of digital money, even as new technologies reshape how payments are made and settled. Stablecoins may find niches in this landscape, but they are unlikely to replace the institutions that anchor the monetary system.
