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UniCredit CEO Andrea Orcel backs Digital Euro, calls it ‘Matter of Sovereignty’

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A member of the ECB Executive Board demonstrated to the Italian banking association in April that commercial banks would be in charge of providing digital euro services to their clientele

According to UniCredit CEO Andrea Orcel, if banks continue to play a key role in the money supply as they currently do, plans for a digital euro will be “very good” for the currency bloc and its lenders.

“It’s a matter of sovereignty for Europe: we cannot have a digital euro,” Andrea Orcel told a conference organised by Italian bank Mediobanca, as reported by Reuters.

The European Central Bank is planning to introduce a digital currency that would counter the rise of non-European online payment companies like Paypal and lessen the euro zone’s dependency on antiquated electronic payment systems run by American corporations like Visa and Mastercard.

“I think the question is how it will happen: are banks going to be the infrastructure and the framework for a digital euro like they are for the cash euro?” Andrea Orcel said.

“If banks are fully integrated, i.e. ‘Dear Customer, you can have cash or you can have digital’…then it’s seamless and it will be very good for Europe and very good for banks,” he added further.

However, the former UBS investment banker stated that a parallel system of banks for the digital euro would have a major impact on the industry by bringing about significant changes in banks’ already-undergoing-a-transformation business model.

“More changes for the sector. We’re preparing for that, whichever is the case,” he said.

A member of the ECB Executive Board, Piero Cipollone, demonstrated through slideshows to the Italian banking association in April that commercial banks would be in charge of providing digital euro services to their clientele.

While that service would be provided free of charge for consumers, merchants would pay a fee to the payment service provider handling the digital euro payment, which in turn would pay a fee to the commercial bank.

Meanwhile, UniCredit is working on three major risk transfer agreements related to loans totalling up to 8.5 billion euro (USD 9 billion) to German and Italian businesses.

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