Digital euro could drain up to 700 billion euros of deposits in bank run, ECB says

**Digital Euro Launch Could Trigger Massive €700 Billion Bank Deposit Exodus, ECB Warns**

The European Central Bank's latest simulation reveals alarming cryptocurrency adoption consequences, projecting that a digital euro rollout could drain up to €700 billion ($810.88 billion) from traditional bank deposits during potential bank runs. This groundbreaking central bank digital currency (CBDC) analysis demonstrates how blockchain-based government cryptocurrencies might fundamentally disrupt traditional banking systems.

ECB researchers warn that approximately twelve eurozone banks could face severe liquidity crises as depositors rapidly shift funds toward the digital euro during financial instability. This massive capital flight scenario highlights growing tensions between traditional banking infrastructure and emerging cryptocurrency technologies, including Bitcoin, DeFi protocols, and government-backed digital assets.

The simulation underscores critical regulatory challenges facing European policymakers as they navigate cryptocurrency integration while protecting established financial institutions. Unlike decentralized cryptocurrencies such as Bitcoin, the digital euro represents centralized blockchain technology that could revolutionize monetary policy implementation across eurozone nations. This development signals intensifying competition between traditional banking services and innovative cryptocurrency solutions, potentially reshaping Europe's entire financial landscape as digital asset adoption accelerates throughout 2024.