The use of the digital euro as a form of investment can be avoided ECB official

The European Central Bank (ECB), the central bank of the European Union, is moving forward with discussions on the digital euro project, but decision-makers argue that it is possible to endow central bank digital currency (CBDC ) of effective tools that prevent it.

To be used as a form of investment, but only as a means of payment, according to Fabio Panetta, member of the Executive Committee of the ECB.

The banker said in his remarks before the European Parliament’s Economic and Monetary Affairs Committee, the EU legislature, that “one of those tools involves quantitative limits on individual holdings. Still another, Panetta said, “involves discouraging their use as a form of investment by applying disincentive remuneration above a certain threshold, with larger holdings subject to less attractive rates.

Panetta said that the bank’s intention is to incorporate both types of tools, caps and tiered remuneration, into the design of the digital euro, adding.

This amount would be comparable to current banknote holdings in circulation,” the banker told EU lawmakers. The population of the euro area is around 340 million, which means that “this would allow holdings of around 3,000 to 4,000 digital euros per capital.

The latest comments come as EU institutions continue their work on the proposed Crypto Asset Markets Regulation (MiCA) that will provide a legal framework for crypto asset markets for the bloc’s 27 member states.

Preliminary ECB analyzes show that keeping total digital euro holdings between EUR1 trillion ($1.04 trillion) and EUR1.5 trillion ($1.56 trillion) would avoid negative effects on the financial system and the EU’s monetary policy, according to Panetta.

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