ECB's Lagarde’s digital euro warning: Why Europe shouldn’t just copy the U.S. stablecoin model

European Central Bank (ECB) President Christine Lagarde argues that Europe should focus on building tokenized settlement infrastructure anchored in central bank money rather than relying on privately-issued stablecoins. During a speech in Madrid, she highlighted that the dominance of USD-pegged stablecoins, like Tether and Circle, poses significant risks to financial stability and could lead to "digital dollarization."

Lagarde pointed to the 2023 Silicon Valley Bank collapse as an example of how stablecoin redemption pressures can create dangerous feedback loops in asset markets. While a consortium of major European banks, Qivalis, plans to launch a privately-issued digital euro to combat dollarization, Lagarde maintains that public infrastructure anchored by central bank money is essential to mitigate risks associated with non-bank issuers.

(Source：CoinDesk)