European Central Bank President: Euro stablecoins pose risks to the banking sector and monetary policy.

CoinFeed reported on May 8th, citing Bloomberg, that European Central Bank President Christine Lagarde stated that even euro-denominated stablecoins pose risks to financial stability and monetary policy transmission, questioning the necessity of introducing such tools. She pointed out that while euro stablecoins might lower eurozone funding costs and enhance the euro's global appeal, the costs would be enormous and outweigh the short-term gains. Lagarde emphasized that stablecoins are not an effective way to enhance the euro's international appeal. Lagarde cited a March working paper from the ECB that warned of significant risks to eurozone banks and monetary sovereignty due to the widespread adoption of stablecoins. She stated that Europe's task is not to "copy tools developed elsewhere" and to continue pushing forward with the introduction of a digital euro.