Defunding

Defunding is the exit door: the process of moving digital euro out of a digital euro account. It is the mirror image of funding.

Two destinations#

Digital euro can be defunded either:

• To a non-digital euro payment account at the scheme participant of the user's choice.
• To cash, at an ATM or a PSP branch, where the participant offers that service.

Availability expectations#

Defunding to a non-digital euro payment account must be available 24 hours a day, on all calendar days of the year — the same standard that applies to funding.

Defunding to cash follows the service hours of the ATM or branch providing it.

Manual and automatic#

PSPs may offer both manual and automated defunding. Automated defunding can be triggered at a pre-defined moment in time, or when a user-defined threshold is breached.

As with funding, keep the two categories separate in your head:

• A user-defined threshold is a convenience rule the user sets — "keep me under €200".
• A holding limit breach triggers the waterfall, which is scheme mechanics, not a preference.

Why it matters for the bank behind the account#

Every defunding operation is digital euro converting back into commercial bank money. Along with waterfall, defunding is the return path that keeps balances from accumulating in central bank money.

For a business user this is the normal state of affairs rather than an occasional event: a business has a holding limit of zero and a mandatory linked account, so digital euro arriving from customers is continuously converted onward.

A defunding operation may involve a different PSP if the institution holding the digital euro account is not the one holding the non-digital euro account.