France has taken a bold step that could reshape Europe’s monetary direction. Lawmakers in the National Assembly have adopted a resolution opposing the introduction of the European Central Bank’s (ECB) proposed digital euro while endorsing Bitcoin and the use of euro-denominated stablecoins as alternatives. The proposal, introduced on October 22, 2025, by Éric Ciotti and members of the Union of the Right for the Republic (UDR), calls on the French government to reject the European Commission’s draft regula ...

Core Insights - A digital euro could potentially lead to a withdrawal of up to 700 billion euros from commercial banks during a bank run, risking liquidity issues for around a dozen euro zone lenders [1][3][4] - The European Central Bank (ECB) conducted a study to assess the risks posed by a digital currency to the banking sector, particularly in scenarios of a "flight to safety" [2][3] - The ECB's findings suggest that under extreme conditions, 13 out of 2,025 banks analyzed could deplete their mandatory cash buffers [4][5] Group 1: Digital Euro Impact - In a hypothetical scenario where depositors withdraw funds to invest in digital euros, 699 billion euros could be moved, representing 8.2% of all retail sight deposits [3] - The ECB indicated that the impact would be more pronounced for smaller market lenders and retail banks [3] - The study also highlighted that the figures might be overestimated, as it does not account for depositors with multiple bank accounts [5] Group 2: Alternative Scenarios - Under a "business as usual" scenario, where depositors do not fully utilize their digital euro allowance, just over 100 billion euros would leave banks, keeping the sector within liquidity requirements [6] - The ECB noted that this outflow could be counterbalanced by a trend of moving from cash to electronic payment methods, potentially increasing bank deposits [6] - The ECB simulated various individual holding limits (500, 1,000, and 2,000 euros), resulting in lower outflow estimates, confirming that holding limits can help maintain financial stability [7]