EddieJayonCrypto
21 Mar 25
The European Central Bank's Chief Economist, Philip Lane, has emphasized the need for a digital euro to mitigate risks from stablecoins and reduce reliance on US payment firms. He highlighted the rapid rise of European interest in stablecoins tied to the US dollar and the region's dependence on US-b...
ECB Chief Economist Philip Lane stresses the need for a digital euro to counter stablecoin influence and reduce reliance on US payment firms. The digital euro is crucial for Europe's monetary and financial autonomy amidst geopolitical fragmentation. Lane highlighted the rapid rise of European interest in stablecoins tied to the US dollar and the region's dependence on US-based payment providers, emphasizing that a digital euro could address Europe's fragmentation in retail payments and serve as a unifying force for collaboration among banks and payment service providers.
The ECB has been developing the digital euro project since 2021 and aims to conclude a preparatory phase by October. ECB President Christine Lagarde emphasized the need to accelerate progress on retail and wholesale versions of the digital euro to strengthen financial sovereignty and reduce external vulnerabilities. This push for a digital euro aligns with previous calls from ECB officials, who have warned of potential financial instability and threats to the traditional banking system posed by dollar-backed stablecoins.
ECB Governing Council member François Villeroy de Galhau and ECB board member Piero Cipollone have also urged the adoption of a digital euro in response to concerns about potential risks introduced by President Donald Trump's aggressive push for crypto adoption and the growing threat posed by stablecoins to traditional banking systems and financial intermediaries.