Europe must build its own modern settlement solutions based on central bank money, because only stable currencies suffer from structural weaknesses. European Central Bank president Christine Lagarde He said Friday (May 8).
In a letter Delivered in Bank of Spain Economic Forum in Latin America In Spain, Lagarde said that euro-denominated stablecoins may provide short-term gains in financing conditions and international outreach, but these benefits will be outweighed by concerns about financial stability and monetary policy transmission.
“If we want to enhance the international appeal of the euro, stablecoins are not an effective way to do that,” Lagarde said.
“The best solution remains the same: more integrated capital markets through the Savings and Investment Union, and over time a secure asset base that matches the scale of our ambitions for the euro’s international role,” Lagarde said.
Lagarde said that while stablecoins are not the solution, the distributed ledger technology (DLT) behind them makes it possible to build a new cross-jurisdictional financial market infrastructure that will not require legacy intermediaries.
Europe needs public infrastructure capable of enabling alternative instruments to operate while anchored by central bank money. For example, Lagarde said that commercial bank token deposits will have the credit quality of regulated institutions and will be traded on distributed ledger technology platforms.
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Lagarde also referred to the European system Bridges The project, which enables DLT-based transactions to be settled with central bank money, is scheduled to become available in September, and the Eurosystem Appiah The roadmap was published in March outlining the implementation of a fully interoperable European financial ecosystem by 2028.
“When central bank money is available locally across the chain, and when token deposits and Mikar“If euro-compliant instruments can operate in the same interoperable environment, market participants will have no reason to rely on a foreign private alternative by default,” Lagarde said.
It was reported in October that eurozone finance ministers were discussing how to strengthen the presence Euro-denominated stablecoinsWith the aim of ensuring that Europe is not marginalized in the rapidly expanding digital currency market.
In April, the Bank of France said it was pushing to strengthen MiCAR because this regulation only partially addresses the risks posed by changes in the digital assets sector, particularly around the widespread adoption of non-European stablecoins.
