Holding limits could support CBDC adoption – ECB study
High threshold, plus reverse waterfall functionality, could mitigate stability risks, researchers say
An experiment suggests that introducing a holding limit for a central bank digital currency could encourage adoption – when the limit is high enough.
In a working paper published by the European Central Bank on October 15, Thomas Garcia, Claudia Lambert, Cosimo Pancaro, Claire Rimbaud and Alice Soldà note that most CBDC projects foresee the introduction of a cap on the amount that individuals could hold in their digital wallets. This is to prevent excessive outflows of deposits from banks, and
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