ECB holds rates steady, advances digital euro rulebook as crypto markets watch

The European Central Bank held its key interest rates unchanged on July 23, keeping the deposit facility rate at 2.25%, the main refinancing operations rate at 2.40%, and the marginal lending facility rate at 2.65%. The decision follows a 25 basis point hike in June, which was the first rate increase in three years. But the rate decision wasn’t the only thing worth paying attention to. The ECB also released version 0.91 of its digital euro rulebook, a quiet but significant step toward building a central bank digital currency that could reshape how money moves across the eurozone. Why the ECB hit pause The hold was widely expected. After raising rates by 25 basis points last month, the Governing Council opted for a wait-and-see approach, citing volatile energy prices driven by geopolitical tensions in the Middle East as a key inflationary risk. The ECB has been emphatic about its data-dependent strategy. Future rate decisions will be made on a meeting-by-meeting basis, not along any pre-committed trajectory. On the balance sheet side, both the Asset Purchase Programme and the Pandemic Emergency Purchase Programme continue their passive runoff. Maturing securities are not being reinv...