ECB President Christine Lagarde Warns of Financial Stability Risks Posed by Euro-Backed Stablecoins

According to Bloomberg, European Central Bank (ECB) President Christine Lagarde stated in a speech delivered on May 8 local time that even euro-denominated stablecoins would pose risks to financial stability and monetary policy transmission, and she questioned the necessity of introducing such instruments. Lagarde noted that while euro stablecoins might help reduce financing costs in the euro area and enhance the euro’s global influence, the associated trade-offs “cannot be ignored.”