The Digital Euro: Consumer Awareness, Adoption, and Household Portfolios and Key Lessons for RBI's e₹ Design
SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation and Infrastructure | SDG 17: Partnerships for the Goals
Reserve Bank of India (RBI) | Ministry of Finance
The article from ECB Research Bulletin (December 19, 2025) titled ‘The digital Euro: Awareness, adoption and household portfolios’ analyzes consumer sentiment toward the proposed Digital Euro using micro-level data from the Consumer Expectations Survey (CES). As the project moves through its preparation phase, the study finds that public awareness has surged from 9% in 2021 to 40% by March 2024. Approximately 45% of consumers across the 11 largest euro area countries indicate they are “likely” or “very likely” to adopt the digital euro for daily transactions, including online purchases and person-to-person payments.
Key findings regarding financial stability and portfolio impact include:
Transactional Focus: Under normal economic conditions, the digital euro is viewed primarily as a transactional asset—a digital equivalent of cash—rather than a savings or investment vehicle.
Minimal Disintermediation: Simulation results suggest that consumers would allocate only about 5% of liquid wealth to a digital euro. This level is estimated to cause only a small reallocation away from traditional bank deposits, easing concerns about large-scale financial disintermediation.
Demographic Trends: Adoption interest is highest among younger cohorts (55% for ages 18-34) and high-income quartiles (53%), though interest remains broad across different education levels.
Holding Limits: The research indicates that the size of a potential “holding limit” (the maximum amount allowed in a digital wallet) did not significantly alter households’ allocation choices under normal conditions.
What is “Financial Disintermediation” in the context of Central Bank Digital Currencies (CBDCs)? Financial disintermediation refers to a scenario where households move significant portions of their liquid wealth out of traditional commercial bank deposits and into central bank-issued digital money. Because deposits are a primary source of funding for commercial banks, excessive disintermediation could increase bank funding costs, reduce their capacity to lend to the real economy, and potentially threaten financial stability during periods of economic stress.
Policy Relevance
The ECB’s findings provide a critical cross-border benchmark for the Reserve Bank of India (RBI) as it scales the Digital Rupee (e₹):
Retail Adoption Strategies: Similar to the ECB’s findings, the RBI’s pilot results emphasize the importance of “offline functionality” and “programmability” to drive the e₹ as a transactional tool rather than a competitor to bank savings accounts.
Addressing the “Digital Divide”: The ECB’s data on demographic-led adoption underscores the need for India to ensure that the Digital Rupee remains accessible to non-smartphone users (via feature phones/SMS vouchers) to prevent a digital-first policy from increasing inequality.
Calibrating Limits: The ECB’s insight that holding limits do not deter transactional use supports the RBI’s cautious approach of implementing tiered limits on e₹-R (Retail) wallets to manage liquidity flows without stifling user convenience.
Trust and Public Communication: The jump in awareness in Europe (from 9% to 40%) highlights that targeted central bank communication is essential for the e₹ to move from a technical pilot to a mainstream payment instrument.
Follow the full news here: The digital euro: awareness, adoption and household portfolios