The European Central Bank plans to set a cap on the holdings of digital euros.
AI Summary1 min read
TL;DR
The European Central Bank plans to cap digital euro holdings to prevent funds from leaving traditional banks, ensuring use for payments only, despite opposition citing protectionism and limited utility.
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European Central Bankdigital euroCBDCbanking regulationpayment systems
On December 23, the European Central Bank received support from the European Council to propose setting a cap on the amount of digital euros that citizens can hold. Regulators are concerned that central bank digital currencies will siphon funds from traditional banks and are considering limiting the amount of digital euros citizens can hold to ensure they are used solely for payments.
Opponents argue that these restrictions will protect traditional banks from competition and could limit the potential uses of the digital euro.