A new report suggests that users of a CBDC, or digital euro, should have unlimited access to it, potentially challenging the central idea that individuals shouldn’t be allowed more than a few thousand euros of the central bank currency to prevent it from becoming a savings tool. The report, written by academic Christian Hofman and produced for the European Parliament, claimed that risks of users abandoning conventional banks are overstated, and concluded that access to a digital euro held the key to “playing an important role in a store of value option for the public.” Though the Parliament is not bound by the report’s outcomes, socialist Dutch lawmaker Paul Tang has insisted he has “strong doubts about these restrictions on holdings”, and warned multiple banks that the now almost critical introduction of CBDC is the only way they’ll stave off competition.
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Users of Digital Euro Should Have Unlimited Access – European Parliament Paper Suggests
A new report suggests that users of a CBDC, or digital euro, should have unlimited access to it, potentially challenging the central idea that individuals shouldn’t be allowed more than a few thousand euros of the central bank currency to prevent it from becoming a savings tool.
The report, written by academic Christian Hofman and produced for the European Parliament, claimed that risks of users abandoning conventional banks are overstated, and concluded that access to a digital euro held the key to “playing an important role in a store of value option for the public.”
Though the Parliament is not bound by the report’s outcomes, socialist Dutch lawmaker Paul Tang has insisted he has “strong doubts about these restrictions on holdings”, and warned multiple banks that the now almost critical introduction of CBDC is the only way they’ll stave off competition.
Central banker Fabio Panetta had previously specified a limit of no more than €3,000 worth of CBDC to be held at once in order to prevent only “day-to-day payments” usage. Panetta’s ideas were challenged by this report, who sourced that Hofman’s point was “that the public’s access to a digital euro is unlimited”.
The ECB will need to make a decision at some point for the digital euro project and according to findings from The Bank of England just last year is also set to potentially limit holdings of its own digital pound at £10,000.
Conversely, there have been several uncertainties raised regarding increased money laundering risks with the CBDC system, as earlier articles told. While we await more detailed protocol and guidance from regulators over the next few months, digital disbursement of assets spares expensive fees that affect on standard fiat transactions.
[h/t Jack Schickler]