Overview
- Speaking in Roda de Barà at a Banco de España forum, ECB President Christine Lagarde said euro‑denominated stablecoins are not an efficient way to expand the euro’s international reach.
- She framed stablecoins as private IOUs that can face fast redemption waves if trust in their reserves breaks, citing the turmoil linked to Silicon Valley Bank as a warning.
- When households move bank deposits into nonbank stablecoins, she said banks shrink their lending channel, so interest‑rate changes hit firms and families less.
- Lagarde urged Brussels to speed work on public digital infrastructure and euro‑linked instruments to avoid “digital dollarization” and loss of monetary sovereignty.
- She noted the market has grown past $300 billion and is dominated by dollar tokens from Tether and Circle, a concentration the BIS also says can erode countries’ monetary control.