ECB wants to limit digital euro accumulation with negative interest rate
European Central Bank Executive Board Member Fabio Panetta spoke about possible ways to stimulate the use of the digital euro as a means of payment rather than savings.
During a recent online seminar, he noted that the launch of a digital currency could encourage consumers to transfer their deposits from commercial institutions to the central bank, especially during periods of economic disruption. This will harm the private banking sector and further deepen the crisis.
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One of the possible methods for solving the problem, he called the introduction of individual limits on the storage of the digital euro. In this case, funds in excess of the established threshold can be automatically redirected to a bank account, or over time, a negative interest rate will be activated, gradually “burning” the deposit.
These measures should discourage the use of the digital euro as a form of investment on a permanent basis.
The ERC continues to assess the prospects for launching a new form of money and to study the economic systems that this may affect.
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