The European Central Bank warned that its proposed digital euro could drain as much as €700 billion from eurozone banks in a severe crisis, potentially straining liquidity across smaller lenders.
The ECB’s simulation, requested by EU lawmakers, found that if individuals could hold up to €3,000 in digital euros, depositors might shift 8.2% of retail deposits away from banks during a panic. Around 13 banks would run out of required cash buffers under this extreme scenario.
The central bank stressed that the event is “highly unlikely” and said smaller holding limits would prevent instability. In a normal situation, only about €100 billion would flow out, leaving the system resilient.
