Christine Lagarde, President of the European Central Bank (ECB), warned that euro stablecoins could also threaten financial stability and the monetary policy transmission mechanism. According to Bloomberg, Lagarde stated, "The effects of euro stablecoins in reducing financial funding costs and expanding international influence are merely short-term advantages, and the cost is greater. If the goal is to strengthen the international standing of the euro, stablecoins are not an efficient means." She also emphasized, "Europe's challenge is not to imitate instruments developed in other regions, but to build a safe-asset foundation commensurate with capital market integration and the euro's status." Previously, in February, Joachim Nagel, President of the German Central Bank, expressed support for euro stablecoins, but the ECB pointed out in a March working paper that widespread adoption of stablecoins could pose significant risks to eurozone banks and monetary sovereignty.
