Bank of Italy calls for digital asset investments by banks despite uncertainty

Bank of Italy Urges Proactive Digital Asset Investment by Banks

Bank of Italy's Guidance on Digital Transformation in Banking

Importance of Early Investment in Digital Technologies

MILAN, Oct 23 (Reuters) - As the financial system turns increasingly digital, banks must resist the temptation to delay investments until they know which technology will prevail, a senior Bank of Italy official said on Friday.

Short-Term Savings vs. Long-Term Opportunities

• Waiting could help lenders save money in the short term, but it "also has costs when it delays learning or the creation of future opportunities," Bank of Italy Deputy Governor Chiara Scotti said in the text of a speech

Strategic Investment Approaches

• Scotti said banks should target investments that lend themselves to usefulness across different scenarios and support institutions' learning process

• Only by experimenting can banks understand how best to adapt the new digital technologies to their business, she said

Balancing Caution and Innovation

• "It makes sense to start on a limited scale... flexibility and staged commitment can reconcile caution with innovation, without requiring an early bet on a single technological path," she said

The Uncertainty of Tokenisation and the Role of Banks

• Scotti said it was still unclear how widely tokenisation — a technology that turns bank deposits into digital tokens that can be moved on blockchain-based networks — would spread, but banks must act if they are to preserve their role as issuers of private money

Reporting Credits

(Reporting by Valentina Za; Editing by Jan Harvey)