The European Central Bank is working on digital currencies, but its launch may be delayed due to systemic risks of stablecoin, Christine Lagarde stated in her first speech as head of the ECB.
In her view, the digital euro “could alter the way in which monetary policy is conducted and transmitted to the real economy. It could also carry implications for the functioning of the global financial system and its stability.”
A stablecoin can break the central bank’s communication with other banks in the form of incoming reports, depriving the financial department of the ability to forecast and plan.
“The question of central bank digital currencies and their optimal design, therefore, warrants further analysis,” said Christine Lagarde.
The head of the ECB proposed to conduct comprehensive tests of the banking system, introducing blockchain in interbank transfers.
“In the future, this will allow digital euro to be compatible with similar products from other central banks,” she said.
At the same time, Lagarde emphasized that the ECB is already cooperating with central banks and international bodies in this direction, and is also reviewing the system of supervision over stablecoins taking into account the peculiarities of new assets.
“Together with the Bank of Japan, the ECB is conducting a research project called “Stella” which is investigating innovations that can facilitate safer, faster and cheaper financial transactions”
Earlier, the Finnish representative in the EU asked the ECB to consider the possibility of issuing its own digital currency.