European Central Bank (ECB) President Christine Lagarde has issued a warning about the risks posed by foreign stablecoins, calling for global coordination to protect EU financial stability.
Presentation of the Issue
On September 3, 2025, during the ESRB conference in Frankfurt, Christine Lagarde highlighted the threat that foreign-issued stablecoins pose to the EU’s financial mechanisms. She emphasized the need for global regulatory harmonization to prevent regulatory arbitrage.
Impact on Euro Liquidity
Lagarde pointed to potential threats to euro liquidity stemming from large foreign stablecoins. She insisted that European legislation should ensure that stablecoins cannot operate in the EU without robust equivalence regimes in other jurisdictions. As she stated: "European legislation should ensure that such schemes cannot operate in the EU unless supported by robust equivalence regimes in other jurisdictions and safeguards relating to the transfer of assets between the EU and non-EU entities."
Need for Global Coordination
Lagarde’s call for tighter regulatory alignment affects stablecoins like USDT and USDC, alongside other non-EU entities. This aligns with the broader regulatory trend toward increased controls on digital currencies, aimed at preventing arbitrage and ensuring crypto offerings adhere to EU financial strategies.
Overall insights suggest strengthened regulatory measures could stabilize euro-based markets while protecting the EU’s financial system from potential risks associated with foreign stablecoins.
