Finance ministers of European Union member states agreed Friday on a pathway to set limits on how much digital euro an individual can hold, moving the bloc closer to launching a central bank digital currency.
The decision was announced during a Eurogroup press conference following the Economic and Financial Affairs Council meeting in Copenhagen, Denmark, on Friday. Officials said they had reached a consensus on the “ceiling for holding limits and then ultimately on the issuance process itself for the digital euro.”
One official noted during the press conference that what had been discussed were the procedures for establishing holding limits, rather than the limits themselves. The statements follow United Kingdom-based cryptocurrency industry advocacy groups calling on the local central bank not to proceed with plans to enforce very similar limits on stablecoin holdings.
A holding limit for the European Union’s central bank digital currency (CBDC) was also discussed in the European Central Bank’s (ECB) progress report on the digital euro, released at the end of 2024. According to a 2024 Politico report, holding limits have become a point of contention between the ECB and national central banks.
Related: Bank of England mulls canning CBDC plan: Report
EU moves forward with digital euro
Despite a global shift toward stablecoins, the EU appears to be doubling down on its digital euro efforts. Earlier this month, the ECB renewed its push to issue a digital euro, drawing pushback from some EU members due to concerns over privacy and risks of damage to commercial banks.
ECB board member Piero Cipollone said at the time that the system “will ensure that all Europeans can pay at all times with a free, universally accepted digital means of payment, even in case of major disruptions.” He also claimed that the bank “will not know anything about the payer and the payee” and that the solution will also work offline. The offline implementation, he claimed, “will be as good as cash in terms of preserving the privacy of the people.”
Related: Australia to test CBDCs, stablecoins in next stage of crypto play
EU’s answer to the rise of stablecoins
ECB policymakers have explored the potential rollout of a digital euro for years, but could be pressured by stablecoin laws and regulations pushed by the Trump administration in the US. In late July, ECB adviser Jürgen Schaaf suggested deploying the digital euro as one of the strategic options for the European Union to address the rapid rise of dollar-based stablecoins.
Similarly, at the end of May, Fabio Panetta — a former ECB official and Governor of the Bank of Italy — also suggested the digital euro as a key tool for mitigating the risks associated with increasing cryptocurrency adoption. “We would be remiss to think that the evolution of crypto-assets can be controlled only through rules and restrictions,” he said, suggesting that the digital euro would be key to addressing the risks.
Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight
Source: https://cointelegraph.com/news/eu-finance-ministers-agree-to-limit-digital-euro-holdings?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
