European Central Bank President: Euro stablecoins pose risks to banking and monetary policy

Breaking News from Mars Finance, according to Bloomberg, European Central Bank President Lagarde stated that even euro-denominated stablecoins pose risks to financial stability and the transmission of monetary policy, questioning the necessity of introducing such tools. She pointed out that while euro stablecoins could reduce financing costs in the Eurozone and enhance the euro’s global appeal, the costs are significant and outweigh short-term benefits. Lagarde emphasized that if the goal is to strengthen the euro’s international attractiveness, stablecoins are not an effective approach. She mentioned a working paper from the European Central Bank in March, which warned that widespread adoption of stablecoins would pose major risks to banks and monetary sovereignty in the Eurozone. She stated that Europe’s task is not to “copy tools developed elsewhere” and continues to promote the introduction of the digital euro.