If left unchecked, a digital euro could prove too popular, the authors warned. “Under no quantity limits and no remuneration, the amount of CBDC in circulation would be larger (i.e., of roughly 65% of quarterly real GDP) and the steady state effects on banks’ valuations and lending would be comparatively more sizable,” the study said.
Digital Euro Needs Curbs to Halt Lending Crunch, ECB Study Finds
