European Central Bank president Christine Lagarde has in a recent interview addressed a number of financial topics, including private stablecoins and the ECB’s plans to potentially launch its own cryptocurrency.
During the interview, Lagarde revealed the regulator wants to “play an active role in this field, rather just acting as observers of a changing world.” She added the ECB will keep looking into the “feasibility and merits of a central bank digital currency [CBDC].”
As CryptoGlobe reported, Lagarde has in the past said the ECB should stay “ahead of the curve” when it comes to stablecoins, adding there is “clearly demand out there that we have to respond to.” In her recent interview, however, Largarde noted the ECB shouldn’t “discourage” private stablecoins.
The prospect of central bank initiatives should neither discourage nor crowd out private market-led solutions for fast and efficient retail payments in the euro area.
The ECB’s president added that a CBDC could have significant implications for the financial system, as it could alter the way monetary policy is transmitted, and render commercial banks redundant as people would be able to open accounts directly with the ECB.
The financial institution is nevertheless considering the launch of its CBDC if the private sector fails to create an efficient solution for cross-border payments, and if cash usage drops across Europe. The eurozone currently has an ECB-backed project for real-time payments, known as TIPS, but it has so far been met with caution by commercial banks.
Cash itself is reportedly still a popular means of payment in Europe. The ECB has in the past revealed that if there are “signs of a future decline in cash usage,” then they could “be a catalyst in accelerating central bank efforts in the area of central bank digital currency.”
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