ECB Would Limit Digital Euro to Maximum 1.5T, Says Fabio Panetta

The central bank's executive board member believes few people understand what a digital euro is because "it's complicated."

AccessTimeIconJun 15, 2022 at 3:51 p.m. UTC
Updated May 11, 2023 at 4:26 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The European Central Bank's Fabio Panetta appeared before the European Parliament's Committee on Economic and Monetary Affairs to report on the development of a digital euro as the program approaches the one-year mark.

The eurozone's central bank initiated a two-year investigation into a possible digital currency last July. While it has not said when it will decide on proceeding, Panetta, an ECB executive board member, has said he's optimistic a central bank digital currency (CBDC) will be ready for launch within four years.

A digital euro, if issued, would be capped at 1.5 trillion euros (US$1.6 trillion), Panetta told the committee. A concern with CBDCs is that consumers might keep all their money in the digital format, in effect depositing their entire savings with the central bank and starving consumer banks of the funds they require to lend to individuals and businesses.

"Keeping total digital euro holdings between one trillion and one and a half trillion euro would avoid negative effects for the financial system and monetary policy," Panetta said in a statement. "As the population of the euro area is currently around 340 million, this would allow for holdings of around 3,000 to 4,000 digital euro per capita."

Referring to a consultation conducted by the European Commission last year, he said many responses were "not enthusiastic, to put it mildly, about the digital euro."

That's partly owing to the fact that few people understand what a digital euro is because "it's complicated," he said.

Still, observers should not put too much weight on the findings, he said.

"Our consultation has not been based on a representative sample of citizens," said Panetta. "... So we have a very unbalanced sample of respondents."

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Jamie Crawley

Jamie Crawley is a CoinDesk news reporter based in London.

Camomile Shumba

Camomile Shumba is a CoinDesk regulatory reporter based in the UK. She previously worked as an intern for Business Insider and Bloomberg News. She does not currently hold value in any digital currencies or projects.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


Read more about