At the request of the European Parliamenta researcher questions the hypothesis of restrictions imposed on the detention of the future CBDC of the Old Continent. It thus questions the interest of a ceiling.
Should there be a cap on the emission of central bank digital currency and thus limit the amount that can be held by each citizen? Fabio Panetta, member of the board of directors of the ECBThe ECB, in its report of last summer, argued in favor of this scenario.
For the central bank, digital euro assets should not exceed 1000 to 1500 billion euros, or 3000 to 4000 euros on average per European. The reason: to avoid negative effects on the financial system and monetary policy.
Realistic but surmountable risks and fears
A report commissioned by the ECON Committee of the European Parliament however hands over questions this recommendation. For its author, Christian Hofmann, it is on the contrary preferable to lift all restrictions on the holding of digital euros.
The researcher, with supporting evidence, “advocates an approach that allows everyone a unlimited access to digital euros “Thus, even if the concerns of central banks are “realistic “Solutions are possible.
The concerns expressed by the ECB and other central banks about the risks of sudden liquidity outflows from bank deposits to CBDCs are realistic,” the author acknowledges.
But he adds: “These risks are manageable “. Moreover, “a digital euro could even support financial stability in the event of a banking crisis “.
The report argues that through proper implementation of the CBDC in “unlimited “the gains would outweigh the risks.
Central banks more efficient in case of massive withdrawals
These conditions would allow central banks and other authorities “to exercise a more effective control in bank run scenarios and improve their overall ability to manage crisis situations “
In a speech this week to the European Parliament’s Committee on Economic and Monetary Affairs, Fabio Panetta did not go back on the ECB’s previous recommendation for a cap.
The leader did, however, advocate for a ” widely available and easy-to-use digital euro “. However, in order to meet these conditions, Panetta recommends the establishment of a regulatory framework, including the attribution by legislators of a legal tender to the digital euro.
Merchants forced to accept CBDC payments
He also advocates the introduction of obligations for merchants to accept CBDC payments.
The obligation for all merchants to accept the digital euro could actually be seen as an opportunity. For example, it would make European payments more reliable and increase competition,” says the ECB executive.
As far as ease of access is concerned, it involves the ability for individuals and merchants to obtain digital euros from their bank, “as they do today with cash “.
The use of a CBDC thus assumes “simplicity and no need to change banks “.
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