MNI BRIEF: Digital Euro No Threat To Bank Liquidity - Panetta

The European Central Bank could impose a cap on holdings of digital currency held there, a senior official said in an interview published Tuesday, and would seek to offset any fall in deposits held by retail banks caused by the introduction of an e-euro. ECB Executive Board Member Fabio Panetta said it was not yet clear whether there would be a cap on payments, though "ideally, there would not."

The ECB is debating whether to only allow digital euro holdings "up to a certain threshold," possibly around EUR3,000, or charge interest above that amount in order to discourage large holdings, as he refuted concerns the central bank could emerge as a competitor to commercial institutions. "If banks do in fact lose deposits, then we can make more liquidity available to them," Panetta told Der Spiegel.