ECB President: Euro stablecoins pose risks to banking and monetary policy

According to Bloomberg, European Central Bank President Lagarde said that even euro-denominated stablecoins pose risks to financial stability and monetary policy transmission, questioning the need to introduce such tools. She pointed out that although the euro stablecoin may reduce euro zone financing costs and enhance the euro's global appeal, the cost is huge and exceeds the short-term benefits. Lagarde emphasized that stablecoins are not an effective way to enhance the international appeal of the euro. Lagarde referred to a March working paper by the European Central Bank that warned that widespread adoption of stablecoins would pose significant risks to eurozone banking and currency sovereignty. She said Europe's task was not to "copy tools developed elsewhere" and continue to advance the introduction of the digital euro.