Europe's Digital Euro: Leaked CBDC Bill Bans Interest & Limits Large Holdings
A leaked draft of the European Commission's upcoming CBDC (Central Bank Digital Currency) bill, obtained by CoinDesk, reveals key restrictions on the proposed digital euro. The document focuses on mitigating potential risks to the traditional banking sector.
The most significant revelation? According to a draft law obtained by CoinDesk, paying interest on or extra charges for using a digital euro would be banned under a draft law seen by CoinDesk, and set to be proposed by the European Commission on. This measure aims to prevent a mass exodus from commercial banks into the digital euro, preserving their liquidity and stability.
Restrictions on CBDC holdings, on remuneration of those holdings, or on rapid large-scale switching of balances, could mitigate the impact on banks. Viable alternatives are also being explored to further safeguard the financial system. The intention is to create a digital euro that complements, rather than replaces, existing payment methods.
One proposed mechanism to achieve this delicate balance is limiting the amount of digital euros an individual or business can hold. While specific figures aren't yet finalized in the leaked draft, the core principle is clear: preventing excessively large holdings that could destabilize commercial banks.
The ban on interest is further reinforced by the text. Paying interest on or surcharges for using a digital euro would be banned under a draft law seen by CoinDesk, and set to be proposed by the European Commission on. Paying interest on or surcharges for using a digital euro would be banned under a draft law seen by CoinDesk, and set to be proposed by the European Commission on. Paying interest on or surcharges for using a digital euro would be banned under a draft law seen by CoinDesk, and set to be proposed by the European Commission on. This aims to make the digital euro primarily a means of payment, rather than a savings vehicle that would directly compete with bank deposits.
The official bill is expected to be formally proposed soon, and further details regarding holding limits and other risk mitigation measures will likely be revealed at that time. This leaked draft provides valuable insight into the European Commission's thinking as they navigate the complex landscape of introducing a digital euro.