Central bank officials set the tone: stablecoins can only play a supporting role and cannot replace fiat currency and central bank money

The Governor of the Bank of Italy, Fabio Panetta, recently made a clear statement regarding the role of stablecoins in the financial system: they can only serve as a supplementary function. This seemingly simple statement reflects the deep concerns of central banks worldwide about crypto assets.

The Central Bank’s Clear Position

The issue of stablecoin positioning

Panetta pointed out that commercial bank money and central bank money will continue to serve as the cornerstone of the monetary system, and stablecoins can only play a supplementary role. This statement is crucial—“supplementary” means stablecoins are not the main actors in the monetary system but are auxiliary tools.

He further explained the fundamental reason for this positioning: the stability of stablecoins ultimately depends on their peg to fiat currency. This dependency inherently limits stablecoins’ ability to operate independently within the financial system. In other words, stablecoins cannot sustain themselves autonomously and must rely on traditional fiat currency systems to exist, which determines that they cannot become the core of the monetary system.

Competitive pressure in the payments sector

Panetta also mentioned an important background: payments have become a core strategic area for banks. Against the backdrop of the global economic shift towards technological power and increasing geopolitical polarization, digital finance poses real pressure on traditional banks. This explains why central banks’ attitude towards stablecoins is to recognize their existence but also to strictly limit their scope.

Specific Risks and Warnings

Risks of multi-issuer stablecoins

The Deputy Governor of the Bank of Italy previously issued a more specific warning: “multi-issuer stablecoins” issued across multiple jurisdictions may pose legal, operational, and financial stability risks to the EU. This is not a vague concern but points to a specific type of risk.

Clear regulatory direction

The central bank’s approach is also very clear: multi-issuer stablecoins should be restricted to regions with equivalent regulatory standards and subject to strict reserve requirements. This indicates that the EU is building a more rigorous stablecoin regulatory framework.

Practical Significance for the Market

This is not only the view of the Bank of Italy but also reflects the consensus of major EU central banks on stablecoins. The “supplementary” positioning essentially sets a ceiling for stablecoins—they can exist but cannot threaten the core position of traditional finance.

For stablecoin projects, this means abandoning the illusion of replacing fiat currency and focusing instead on improving payment efficiency in specific scenarios. For investors, it indicates that the development boundaries of the stablecoin market are being clearly defined by central banks.

Summary

The statement from the Governor of the Bank of Italy actually addresses a long-standing market debate: can stablecoins replace fiat currency? The answer is no. The inherent limitations of stablecoins (their dependence on fiat) determine that they can only be supplementary, not substitutes. The EU is ensuring that stablecoins develop within a controlled scope through strict reserve requirements and regulatory restrictions. This reflects the common stance of central banks worldwide: they want to allow financial innovation but also safeguard financial stability.