Bank of Italy Governor Says Digital Euro Essential for Managing Cryptocurrency Risks Over MiCA Regulation
Cointelegraph reported on May 30 that Bank of Italy Governor Fabio Panetta released the central bank's annual report advocating for the digital euro as the primary tool to manage cryptocurrency risks. Panetta stated that cryptocurrency regulation alone cannot address systemic risks posed by digital assets. The governor argued that only a central bank-backed digital euro could provide necessary trust and functionality in the evolving payment landscape.
The former European Central Bank official warned against relying solely on rules and restrictions to control crypto-asset evolution. His comments came as the European Union's Markets in Crypto-Assets Regulation entered full force in late 2024. Panetta emphasized that digital euro development must advance to maintain financial stability and meet demand for secure digital payments.
Limited Impact of MiCA Regulation on EU Stablecoin Market
Since MiCA became effective, only limited electronic money token stablecoins have been issued in the EU with restricted circulation, according to Panetta's report. CoinLaw data shows that 78% of stablecoins currently circulating in the EU require reclassification under MiCA standards. Only 21% of existing stablecoin projects meet full compliance requirements as of early 2025.
The regulation has not generated significant stablecoin developments in Italy. Panetta noted little interest in crypto-asset issuance by supervised intermediaries and other operators. Instead, growing focus has shifted toward custodial and trading services. Chainalysis reported that stablecoins account for 60% of the $10 trillion annual transaction volume on-chain, demonstrating their continued market importance despite regulatory constraints.
MiCA has encouraged businesses to report crypto asset service plans or authorization applications. However, the framework has not fully protected European savers from risks associated with regulatory differences globally. EU citizens remain exposed to failures of platforms or issuers based in jurisdictions lacking adequate controls or transparency.
Global Stablecoin Dominance Challenges European Monetary Sovereignty
CoinDesk reported that stablecoin market capitalization exceeded $200 billion in March 2025, with USD-backed tokens maintaining overwhelming dominance. Market leader Tether's USDT holds approximately $140 billion market cap, while Circle's USDC approaches $60 billion.
The US Treasury Secretary Scott Bessent stated at the Digital Asset Summit that stablecoins will help maintain the dollar as the dominant reserve currency. The Digital Chamber research shows 98% of stablecoins link to the US dollar, extending American financial influence globally.
Panetta expressed concern about heterogeneity in regulatory approaches worldwide. He called for stronger international cooperation and urged the EU to lead on establishing global regulatory standards. The governor warned that foreign platforms or issuers without adequate controls pose risks to European financial stability.
Digital Euro Development Progresses Despite Public Skepticism
European Central Bank officials confirmed the digital euro preparation phase continues through 2025, with potential launch targeted for October 2025. The project entered its preparation phase in November 2023, focusing on finalizing rulebooks and selecting platform providers.
CoinTribune analysis suggests ECB motivation includes reducing European dependence on foreign payment solutions like Google Pay and Apple Pay. The digital euro represents a European response to growing cryptocurrency and stablecoin adoption in the United States.
Panetta's remarks align with ECB Executive Board member Piero Cipollone's advocacy for digital euro launch. Both officials cite growing popularity of US dollar stablecoins as justification for European central bank digital currency development. The digital euro project aims to preserve central bank money's role as monetary anchor for the payment system while providing secure, efficient digital payment instruments.
The preparation phase involves extensive testing and stakeholder consultation to ensure the digital euro meets user needs and Eurosystem requirements. By end-2025, the Governing Council will decide whether to advance to the next preparation phase.
Related Reading on BTC Peers
Read our Global Bitcoin Policy Index analysis to understand how different countries approach Bitcoin regulation and policy frameworks. This comprehensive resource provides data-driven insights into global regulatory trends affecting cryptocurrency adoption, helping readers track policy developments that influence Bitcoin's legal status across jurisdictions. The index offers valuable context for understanding how regulatory approaches like MiCA compare to Bitcoin-specific policies worldwide.
