SS #60 - EU Council Endorses Digital Euro with Strict Holding Limits

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Good morning!

Merry Christmas to everyone, I hope you’re enjoying the holiday break and getting ready to ring in 2026 next week. In stablecoin news, the Council of the European Union has formally backed the European Central Bank’s (ECB) digital euro proposal. However, this endorsement comes with a catch: strict holding limits will be enforced to prevent the currency from triggering bank runs or compromising the stability of the traditional banking sector.

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In Today's Edition:

• Headline: EU Council Endorses Digital Euro with Strict Holding Limits

• Quick Bites: Russia’s Central Bank Unveils New Crypto Rules to Be Adopted in 2026

• Yield of the Week: 13.46% APY on Strata

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HEADLINE

EU Council Endorses Digital Euro with Strict Holding Limits

State of play: The Council of the European Union has officially endorsed the European Central Bank’s (ECB) plan for a digital euro, but insists on strict holding limits to prevent the currency from triggering bank runs or destabilizing the commercial banking sector.

• The Council's backing signals a unified front between EU national governments and the ECB, clearing a major hurdle for forthcoming legislation.

• Policymakers are prioritizing "payment utility" over "store of value," likely capping digital euro wallets to prevent a mass exodus of deposits from commercial banks.

• Critics argue these limits are designed to shield traditional banks from competition rather than just ensuring financial stability.

What’s Next: Legislators will now move to codify specific holding limits (likely between €3,000–€4,000). This will cement a two-tier system: the digital euro for regulated daily payments, and private stablecoins/crypto for global liquidity and wealth storage.

Why it Matters: It highlights a fundamental tension: the EU wants the efficiency of digital money without disrupting the legacy banking model. By capping holdings, they are intentionally limiting the CBDC's utility, leaving the "store of value" and "high-volume" use cases exclusively to the private crypto market.

Our Take: The digital euro is being "handicapped" by design to shield incumbent banks from competition. This creates a massive opportunity for private stablecoins and DeFi, as users seeking a limit-free, borderless digital asset will find the sovereign alternative too restrictive for serious capital.

QUICK BITES

• Russia’s central bank unveils new crypto rules to be adopted in 2026.

• Sling Money receives approval to offer crypto services in UK as stablecoin payments gain popularity.

YIELD OF THE WEEK

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Strata jrUSDe: 13.46% APY

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Avant avUSD: 10.02%-17.71% APY

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.