ECB’s Lagarde warns against using euro stablecoins to counter dollar dominance

European Central Bank President Christine Lagarde has cautioned against promoting euro stablecoins as a direct challenge to the dominance of US dollar-backed tokens. Instead, she advocates for Europe to concentrate on developing tokenized financial infrastructure anchored by central bank money. Lagarde noted the significant growth of stablecoins, now exceeding $300 billion, with the market heavily dominated by US dollars and controlled by Tether and Circle. She argued that while stablecoins can extend reserve currency reach and support tokenized settlement, euro stablecoins could introduce financial stability risks, weaken monetary policy transmission, and pressure banks. Lagarde suggested that Europe should build public infrastructure, such as the Eurosystem's plans for wholesale settlement via Pontes and the ECB's Appia roadmap for an interoperable tokenized financial system by 2028, rather than replicating the US stablecoin model. Experts suggest that without support for scalable euro stablecoins, Europe risks a divided market where institutional finance uses regulated rails while crypto payments and DeFi continue on dollar stablecoins.

(Source：Crypto Briefing)