Several banking, payments, consumer and retail groups submitted written feedback via the Euro Retail Payments Board on the European Central Bank’s preliminary methodology for calibrating digital euro holding limits. Most respondents endorsed holding limits as a safeguard against deposit outflows and financial stability risks, but challenged the methodology’s transparency, its reliance on top-down modelling and averages, and the way “usability” is used to infer appropriate limit ranges. The European Banking Federation argued the ECB’s approach is hard to scrutinise or replicate because key tools, assumptions and data are not fully disclosed, and it favoured a bottom-up impact assessment that better captures idiosyncratic balance-sheet effects, especially for smaller banks. It called for a low holding limit aligned with day-to-day P2P and point-of-sale payments, referencing the ECB’s SPACE survey figure that the median cash held at the beginning of the day was EUR 59, and urged excluding rents and loan and mortgage payments from usability calibration. The European Association of Co-operative Banks proposed embedding maximum limits in the Digital Euro Regulation, with a zero limit for businesses and a maximum of EUR 500 for individuals, and criticised assumptions in the ECB’s constrained balance sheet optimisation framework, including access to alternative liquidity and the treatment of Liquidity Coverage Ratio (LCR), Net Stable Funding Ratio (NSFR) and interest rate risk in the banking book. The European Savings and Retail Banking Group similarly urged a transaction-by-transaction usability benchmark, asked how heterogeneity across banks and countries will be modelled, and requested more detail on the supervisory data collection underpinning the analysis as well as greater openness, including sharing model code and survey outputs. Other respondents focused on account structure and user experience implications of limit design. The European Payment Institutions Federation supported allowing multiple digital euro payment accounts and warned that fixed per-account limits could hinder innovation unless limits can be orchestrated across accounts and the waterfall and reverse-waterfall mechanisms reliably enable payments above the cap; it also argued that merchant and corporate limits should be absent or tailored. BEUC welcomed progress on smartphone-independent offline solutions but called for further user research and argued that low limits can undermine privacy, budget management, receipt of incoming payments and the viability of multiple and joint accounts, suggesting account portability as a counterbalance. EuroCommerce questioned whether consumer holding limits are necessary at all if digital euro holdings remain non-interest bearing and use cases are kept simple, and linked lower system complexity to enabling multiple wallets per citizen.
European Central Bank 2025-01-28
European Central Bank receives stakeholder feedback urging low and stable digital euro holding limits and questioning its calibration model
Banking and retail groups critiqued the European Central Bank's (ECB) digital euro holding limits, endorsing limits to mitigate deposit outflows but criticizing transparency and top-down modelling. The European Banking Federation and others called for a bottom-up impact assessment and clearer assumptions, suggesting specific holding limits and exclusions. Concerns included account structure, user experience, and fixed limits' impact on innovation and privacy.