Digital Euro: Threat to European Banks?
Update: 2025-10-10
Description
Could a digital euro trigger a bank run? A new ECB study reveals that a sudden shift to digital euros could drain up to 700 billion euros from commercial banks, potentially pushing a dozen into a liquidity crisis. While the ECB downplays the worst-case scenario, the report highlights the risk of deposits fleeing to the safety of the ECB, especially for smaller banks. The key to preventing financial instability? Setting the right holding limits for digital euros, a decision now in the hands of EU finance ministers.
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