A wallet of digital euros – to be spent with the card or the application on your mobile phone – which could have reserves of up to 3,000 euros. This is the hypothesis – theoretical because the final decision will take place close to the launch of the digital euro – on which the ECB is working on the basis of the estimates indicated by the European Parliament, while the costs for the banks of investing in their IT systems, customer interfaces and POS are being studied: thanks to synergies and ‘mutualization’ of the charges, the ECB’s assessments indicate “a range between four billion euros and 5.77 billion in total” at system level, not far from the figures that the European Commission had communicated in 2023. This is what emerges from the technical analyzes in preparation of the digital euro, now that the finance ministers of the Eurogroup have unblocked the dossier, preparing the field for a common position of the EU Council, while a draft report from the rapporteur to the European Parliament is arriving which would start the ‘trilogue’ with the Commission EU in 2026.
The main issue among the ministers was precisely the maximum amount that European citizens will be able to hold in digital euros: a sensitive issue for banks because it involves public money that would escape their deposits. The figure indicated to the ECB by the ‘co-legislators’ – non-binding – is precisely 3,000 euros: the wallet’s availability will not be able to go beyond this, although anyone will be able to make payments exceeding this threshold by drawing directly from the bank account but still paying in digital cash. The ECB’s work focused on one point: how much money would the digital euro take away from bank deposits, with its attractiveness of being a digital but cash currency, i.e. public because it is issued directly by the ECB? What emerges is that in a normal situation, the outflow of liquidity from banks to wallets would be “contained”: it would stop at around one hundred billion euros at a European level, with an aggregate bank liquidity coefficient ‘LCR’ which would drop from 166 to 163%.
The case is different – which the ECB defines as “very hypothetical and unlikely” and “never happened in the 25 years of the euro’s existence” – of a major financial crisis in which European citizens would be pushed to flee bank deposits. Would the digital euro be a haven-buying magnet, exacerbating a flight from bank deposits? according to the ECB’s analyses, assuming that all holders rush to fill their wallets up to the hypothesized maximum of 3,000 euros, the outflow of deposits would reach 699 billion euros. “More significant” impact, but only 13 European banks out of 2,025 would drop to an Lcr equal to 100%, and of these only 9 would go below, however remaining within the liquidity standards of Basel and European regulation. Money that in any case would remain in euros, under the umbrella of the ECB. The case of stablecoins, the competing form of digital payments chosen by the USA and with a dominant share in dollars, is different: the ECB’s fears are that there would be no limit to outflows from deposits, and these would evaporate and transform into dollars, i.e. they would leave European jurisdiction.