In an opinion article, three senior European Central Bank (ECB) executives, including board member Piero Cipollone, made the case that a retail central bank digital currency (CBDC) won’t have the negative impact on banks that many predict. They were writing in VoxEU, the Centre for Economic Policy Research (CEPR) publication.
As context, various banking associations have argued that the launch of a digital euro could see deposits migrate to the CBDC. A recent report commissioned by the European Banking Federation stated that a digital euro would result in deposit flight, leading to a permanent reduction in EU GDP. One of the German banking associations, BVR, argued for lowering the proposed CBDC holding limit from €3,000 to €500.
As we reported last week, the latest iteration of the draft digital euro legislation allows banks to set the limits themselves.
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