European Union finance ministers reached an agreement on Friday regarding the limits on the amount of digital euro an individual can hold, progressing the bloc towards the launch of a central bank digital currency.
This announcement was made during a Eurogroup press conference subsequent to the Economic and Financial Affairs Council meeting in Copenhagen, Denmark. Officials indicated that a consensus was achieved on “holding limits and the issuance process for the digital euro.”
One official mentioned during the press conference that the discussion focused on the processes for establishing holding limits rather than the limits themselves. This follows calls from UK-based cryptocurrency advocacy groups urging the local central bank to refrain from implementing similar regulations on stablecoin holdings.
The proposal of a holding limit for the EU’s central bank digital currency (CBDC) was also covered in the European Central Bank’s (ECB) progress report on the digital euro, published at the end of 2024. A 2024 Politico report highlighted that holding limits have become a point of contention between the ECB and national central banks.
Related: Bank of England considers abandoning CBDC plan: Report
EU advances with digital euro
In light of a global move towards stablecoins, the EU appears to be reinforcing its digital euro initiatives. Earlier this month, the ECB emphasized its commitment to launching a digital euro, facing pushback from some EU member states regarding privacy concerns and potential risks to commercial banks.
ECB board member Piero Cipollone remarked that the system “will guarantee that all Europeans can make payments at any time using a free, universally accepted digital means of payment, even amidst significant disruptions.” He further asserted that the bank “will not have any information about the payer and the payee” and that the solution would function offline as well. This offline capability, he claimed, “will uphold the privacy of individuals just like cash.”
Related: Australia to pilot CBDCs and stablecoins in next phase of crypto initiatives
EU’s response to the emergence of stablecoins
ECB officials have been examining the potential implementation of a digital euro for years but may face pressures from stablecoin regulations introduced by the Trump administration in the US. In late July, ECB adviser Jürgen Schaaf proposed using the digital euro as a strategic approach for the EU to counter the rapid proliferation of dollar-based stablecoins.
Similarly, at the end of May, Fabio Panetta, a former ECB official and Governor of the Bank of Italy, also identified the digital euro as a crucial instrument for addressing the threats posed by the growing adoption of cryptocurrencies. “It would be unwise to think that the evolution of crypto-assets can be managed solely through rules and restrictions,” he noted, asserting that the digital euro is vital for mitigating the associated risks.
Magazine: Crypto aimed to disrupt banks, now it is becoming them amid stablecoin conflict
