Digital Euro Will Be Limited to 1.5T, Says ECB’s Fabio Panetta

Vignesh Karunanidhi
Digital Euro Will Be Limited to 1.5T, Says ECB's Fabio Panetta
Source: Giesecke+Devrient

Fabio Panetta, a member of the European Central Bank’s executive board, says that the supply of digital euro will be limited to a maximum of 1.5 trillion.

The report was provided by Fabio Panetta during his appearance before the European Parliament’s Committee on Economic and Monetary Affairs to display the progress and development of the digital euro. The development has almost hit the one-year mark.

The European Commission tweeted about rolling out a digital euro on April 6. They indicated that they are collaborating closely with financial advisors on the future launch of the digital euro. According to the Commission’s information, the consultation period ran from April 5, 2022, until June 14, 2022.

Payment industry experts, payment service providers, financial intelligence units, payment infrastructure providers, developers of payment solutions, merchant associations, consumer associations, retail payments regulators and supervisors, anti-money laundering (AML) supervisors, and other relevant experts and authorities were among those who participated in the consultation.

Panetta is optimistic about the digital euro launch in four years

The proceedings regarding the digital euro were not made clear by the central bank. But Fabio Panetta is almost certain that the rollout will happen in four years.

Panetta told the committee that the euro would be capped at 1.5 trillion euros. One concern regarding digital currency is that it will lure consumers into putting all their savings digitally. This would reduce the deposit of savings in banks, which would affect the banks’ survival and lending structure.

Source: TAS Consultoria

“Keeping total DE holdings between one trillion and one and a half trillion euro would avoid negative effects for the financial system and monetary policy.” “As the population of the euro area is currently around 340 million, this would allow for holdings of around 3,000 to 4,000 digital euro per capita.”

Panetta said in a statement

Panetta also said that few people don’t understand the digital version of the euro and think that it’s complicated.