At a central banking forum in Portugal, European Central Bank President Christine Lagarde criticized stablecoins, stating that they should not be viewed as true money.
Stablecoins and the Privatization of Money
Lagarde noted that stablecoins, often issued by private companies, could threaten control over monetary systems.
"My concern is the creeping privatization of money," she said, pointing out that firms like Circle and Tether could erode central banks’ ability to steer monetary policy effectively.
The Need for a Digital Euro
Lagarde reaffirmed the ECB’s support for the digital euro, describing it as a necessary step to maintain control over Europe’s financial infrastructure in the digital age.
Risks to Financial Infrastructure
She warned of potential negative impacts on the influence of official currencies if stablecoins, often used as fiat substitutes, are left unchecked.
Thus, Christine Lagarde's comments highlight the importance of regulating stablecoins and supporting central bank digital currencies to protect the financial system.
