The Council of the European Union officially approved the European Central Bank's proposal to impose limits on individuals' holdings of future digital euro, marking a key step toward shaping the legal framework for central bank digital currency.
A negotiating position was agreed upon for December 19, 2025, and the Council's mandate will now guide the upcoming talks with the European Parliament.
At its core, this decision reflects a cautious approach: the digital euro is meant to be a payment tool, not a new savings vehicle that could disrupt the traditional banking system.
#### Why does the European Union want limits on holdings?
The main concern behind the limits is financial stability. Policymakers want to avoid a scenario where households transfer a large portion of their savings from commercial banks to a risk-free digital euro issued by the central bank.
Such a shift could quickly drain bank deposits, especially during periods of stress, increasing the risk of a bank run. By limiting the amount of digital euro an individual can hold, authorities aim to preserve the role of commercial banks in credit creation while simultaneously offering a modern public digital payment option.
In practice, the digital euro will be positioned as a cash-like instrument, useful for daily transactions, but unattractive for long-term wealth storage.
#### How will the limits work?
Under the framework backed by the Council, the European Central Bank will set the exact limits, but within a maximum cap agreed upon only by European lawmakers. These caps will not be fixed forever; they must be reviewed at least every two years, allowing for adjustments as adoption patterns and financial conditions evolve.
Although a final number has not yet been set, the European Central Bank previously analyzed potential limits ranging from €500 to €3000 per person. This range reflects a balance between usability and risk containment, high enough for daily spending but low enough to discourage the replacement of deposits.
#### Different rules for businesses and large payments
The framework also draws a sharp distinction between households and businesses. Business users are expected to have a zero holding limit, meaning they can use the digital euro for specific transactions but will not be allowed to hold balances.
For large payments, the system will rely on integration with existing bank accounts. If a transaction exceeds the individual limit for digital euro holdings, the excess amount will be automatically deducted from a linked commercial bank account. This design maintains flexibility for users while imposing strict limits on the digital euro itself.
#### What happens next?
With the Council's position in mind, formal negotiations with the European Parliament on the final legal text could begin. If the legislation is adopted in 2026, the European Central Bank estimates that the digital euro could be technically ready for potential issuance around 2029.
The broader message from Brussels is clear: the digital euro is moving forward, but not at the expense of the current banking system. The limits on holdings stand out as a central pillar in this reconciliation, prioritizing stability over speed as Europe designs its future digital money.
