Digital euro may have transaction limits and store-of-value caps

Quick Take

  • The European Union’s potential central bank digital currency may have low transaction and storage thresholds for individual users.
  • The European Central Bank is currently investigating and developing a digital euro prototype.

The European Union’s central bank digital currency (CBDC) may have transaction and store-of-value limits for individuals, Fabio Panetta, an executive board member of the European Central Bank (ECB), suggested at the "Towards a legislative framework enabling a digital euro" conference hosted by the European Commission.

Exact limits are not set in stone — as the digital euro project is still in an investigation phase within the ECB — but Panetta mentioned 3,000 as an example store-of-value limit and 1,000 transactions as a monthly limit.

“If we give access to a means of payment, which is relatively limited, there are no transaction costs because you only need to have a smartphone,” Panetta said, explaining: “There will be risks that people could use this possibility to move, for example, their deposits of other banks or their money out of financial intermediates.” 

This would be a threat to financial stability in times of crisis, he added — which is why the ECB is looking to introduce transaction limits for the potential CBDC. 

“Digital euro would be an additional option for retail payment — not a challenge to the function of the financial system,” Panetta said, highlighting that the CBDC is not meant to replace cash.

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Panetta also pointed toward a €50 cap on transactions, citing anti-money laundering provisions.

However, Christian Lindner, the German minister of finance, expressed concerns. “I wonder whether people would accept €50 as they can pay in cash hundreds and more,” he said, adding: “We should introduce a digital euro that is really accepted by people and not only by policymakers.”

The ECB is expected to decide whether to move forward with a realization phase by September 2023. With a legislative proposal expected from the European Commission, the continuation of the European CBDC project is becoming more likely. 

Update: Added new information regarding a potential €50 cap on transactions, as well as a quote from Christian Lindner.


© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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About Author

Inbar is a reporter covering crypto policy and regulation with a focus on Europe. Before The Block, she worked with several publications in Brussels including The Parliament Magazine and Are We Europe. Inbar holds a bachelor's degree in international relations from University College Utrecht and a master's degree in international politics from KU Leuven.

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