- The ECB has rejected a proposal to support euro-denominated stablecoins, saying it is too risky.
- According to Lagarde, stablecoins will destabilize bank deposits and weaken its ability to control interest rates.
The European Central Bank (ECB) has rejected proposals for euro-based stablecoins. The agency warned EU finance ministers that expanding the issuance of such digital assets could weaken bank lending and complicate monetary policy.
How to сообщает Reuters reports that the ECB officials’ objections came in response to a report from the Bruegel think tank at an informal meeting of the Economic and Financial Affairs Council in Nicosia.
ECB President Christine Lagarde warned that the issuance of stablecoins could lead to a reduction in bank deposits and an increase in funding costs for banks. She said this process undermines the central bank’s ability to manage interest rates.
Lagarde stated that, instead of stablecoins, she favors a tokenized financial infrastructure based on central bank money. She cited the Eurosystem Pontes project and the Appia roadmap for wholesale settlements as examples.
Europeans currently account for 38% of all stablecoin transactions globally, but euro-denominated tokens account for only 0,3% of the total. stablecoin in euros EURC from Circle (EURC) ranks only 12th in the world in According to Coin Market Cap.
Risk Warning:
The information on this website is for informational and educational purposes only and does not constitute investment advice or financial recommendations. Cryptocurrencies and digital assets carry a high level of risk, including possible loss of capital. The editors are not responsible for decisions made based on the published materials. It is recommended that you conduct your own research (DYOR) before making investment decisions. Read the editorial policy. https://happycoin.club/about/