The Future of Digital Money and Its Central Role in the European Monetary System

The path to a completely digital economy is being charted by European central banks, which reaffirm the key role of state-controlled digital money within the monetary system. Meanwhile, digital private currencies face growing regulatory skepticism about their true functionality in the financial ecosystem. The discussion gained new prominence during recent pronouncements by leaders of the Italian central bank.

Digital Money Under State Control vs. Private Stablecoins

Fabio Panetta, governor of the Banca d’Italia, reaffirmed in a recent statement that both commercial bank money and money issued by the central bank will evolve into fully digital formats, remaining as structural pillars of the monetary system. According to Cointelegraph, Panetta was clear in outlining a clear hierarchy: while official digital currencies anchor the entire financial ecosystem, stablecoins will only have complementary functions.

The position articulates a fundamental perspective: stablecoins exist in continued dependence on traditional currencies. Its stability is not self-sufficient, but derived entirely from the pegging to established fiduciaries. This means that these currencies are unable to operate autonomously within monetary frameworks, remaining subordinate to structures controlled by public authorities.

Strategic Battleground Payouts

Panetta characterized payments as a domain of critical competition in which technology and political decisions have shaped the configuration of the contemporary monetary system. As reported by the Italian news agency ANSA, the governor highlighted how classic economic variables—investment, trade flows, tax regimes—are increasingly influenced by geopolitical choices rather than purely market forces.

Digital money has emerged as a key infrastructure in this landscape, representing both strategic power and regulatory accountability for financial institutions operating in geopolitically fragmented environments. The payments infrastructure becomes a pressure field where banks have to adapt to increasingly less cooperative configurations.

Specific Risks of Multi-Jurisdictional Stablecoins

Chiara Scotti, Deputy Director of the Italian institution, raised the alert to a particular risk: stablecoins issued simultaneously in multiple jurisdictions under a single brand. In a 2025 speech, Scotti warned that this operational fragmentation imposes legal, operational, and financial stability risks that could compromise the European Union’s supervisory framework.

Scotti recommended severe restrictions on these cross-border structures, advocating that they operate only in jurisdictions with equivalent regulatory standards, in addition to strict requirements for reserve and redemption mandates. The central concern: geographically decentralized issuance could undermine the consolidated supervisory mechanisms that the EU has established.

Still, Scotti recognized real potential: properly supervised stablecoins could reduce transactional costs and increase operational efficiency in payments. The debate does not deny utility, but insists that such utility must occur under a robust and non-fragmented regulatory regime.

Geopolitics and the Reshaping of the Monetary System

The background of this discussion transcends technology. European central banks emphasize that digitalization does not represent isolated innovation, but long-term structural evolution driven by public institutions, deliberately contrasting with privately issued crypto assets.

The global economic center of gravity shifts under the influence of technological advances while international cooperation declines. In this context, control over payment infrastructure and money format becomes a strategic issue that determines who exercises power over the future monetary system. European officials signal that this power will remain in the hands of public institutions, not private issuers.

The European vision is consolidated: centralized digital money and supervised stablecoins coexist within a clear hierarchy where the monetary system remains based on official currencies and public control, while private assets occupy a subordinate role in this order.