According to ECB President Christine Lagarde, speaking on Friday (May 8) at the Banco de Espana LatAm Economic Forum, euro-denominated stablecoins pose risks to financial stability and monetary-policy transmission that outweigh any benefit to the euro’s global standing. Lagarde argued that the case for promoting euro stablecoins is weaker than perceived, citing risks including bank runs, de-pegging events similar to the 2023 SVB-Circle episode, deposit substitution that could narrow the bank lending channel, and broader financial fragmentation. She pointed instead to the ECB’s tokenized wholesale settlement projects as the appropriate infrastructure for Europe’s digital finance ambitions. The stance diverges from Bundesbank President Joachim Nagel, who publicly backed the need for a European stablecoin ecosystem in February.
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