ECB Simulation Highlights Potential Impact of Digital Euro on Bank Deposits

A recent simulation commissioned by EU lawmakers explored the potential impact of a digital euro on bank deposits. The simulation, designed to gauge investor behavior during a financial crisis, showed that individuals might move significant funds from traditional bank accounts into ECB-backed digital wallets if faced with heightened uncertainty. If all citizens were to use the full €3,000 limit in this scenario, the study estimates roughly 8% of retail deposits could be withdrawn – enough to significantly impact around a dozen smaller banks’ liquidity levels.