A general framework to evaluate the orderly implementation of monetary policy: an application to the introduction of the digital euro

On 08/01/2025, the Bank of Italy issued an update regarding "A general framework to evaluate the orderly implementation of monetary policy: an application to the introduction of the digital euro". This report proposes a methodology to estimate the maximum amount of digital euro (D€) that is consistent with an orderly implementation of monetary policy in the Euro Area. The study suggests that the maximum amount of D€ should not exceed 1,700 billion euros to ensure no national banking system faces liquidity crises post-introduction.