The global stablecoin market surged past $180 billion in 2025, reflecting rapid in digital payments and finance.
bank of Italy Governor Fabio Panetta stated that banks, not stablecoins, will anchor the future monetary system.
This perspective emphasizes the need for trusted institutions in digital money evolution.
Banks' Role in Digital Money
Panetta told Italy's banking association that commercial bank money will become fully tokenized.
He said,
I expect the system will remain centred around central bank and commercial bank money, both of which will need to become digital.
This shift supports cefi by enabling banks to maintain control over issuance and stability.
Tokenization allows efficient, programmable assets on distributed ledgers.
stablecoin Vulnerabilities Exposed
Stablecoins rely on pegs to traditional currencies for stability, limiting their core role.
Panetta noted it's hard to predict their evolution but insisted they serve only complementary functions.
Deputy Governor Chiara Scotti highlighted run risks and interconnectedness in stablecoins.
She warned these could lead to broader financial instability if unchecked.
In DeFi, such vulnerabilities amplify due to decentralized protocols lacking central oversight.
According to ECB reports, wide adoption of foreign stablecoins risks euro area macroeconomic stability.
Regulation Shaping the Landscape
The EU's MiCA framework regulates stablecoins but has not boosted adoption among Italian firms.
Panetta critiqued its limited buffer against risks, calling for stronger measures.
Global regulatory divergences, like between EU and US approaches, enable arbitrage.
This fragmentation undermines consistent oversight in cross-border transactions.
Effective regulation must address multi-issuance stablecoins' liquidity mismatches.
Scotti stressed the need for harmonized rules to prevent sanctions evasion and fraud.
Trends in Cefi and DeFi
Cefi sees banks integrating digital assets, driving institutional adoption.
Tokenized deposits anchor value on bank balance sheets, enhancing trust.
In contrast, DeFi offers permissionless innovation but faces higher volatility.
Protocols like lending platforms have experienced runs, as seen in past collapses.
Panetta advocates a twin approach: central bank digital currencies alongside commercial ones.
This fosters faster development while preserving sovereignty.
Future of Digital Money Anchors
Banks issuing digital money could reduce reliance on foreign stablecoins.
A digital euro would provide a public anchor, limiting private disruptions.
Regulators view central bank money as the ultimate settlement asset.
This ensures legal finality and systemic stability in tokenized ecosystems.
in cefi may outpace DeFi if regulation favors supervised entities.
However, DeFi's growth demands balanced rules to harness benefits without excess risk.
Balancing Innovation and Stability
The digital euro aims to unify payments across Europe, countering fragmentation.
It preserves privacy while enabling traceability for oversight.
Stablecoins challenge traditional systems but cannot fully replace bank-anchored money.
Panetta's view aligns with sustaining a two-tier monetary structure.
This emphasis on banks anchoring digital money ensures stability amid rapid adoption.
It guides regulation to support cefi and DeFi growth while protecting the financial system.
