ECB President Lagarde Highlights Risks of Euro Stablecoins
- Christine Lagarde, ECB President, identified euro-denominated stablecoins as a financial stability risk on May 8, 2026.
- Lagarde cited the March 2023 incident when USDC depegged to $0.877 during Silicon Valley Bank’s collapse, revealing $3.3 billion in Circle reserves.
- The global stablecoin market has surged from under $10 billion six years ago to over $300 billion today, with nearly all pegged to the U.S. dollar.
- The ECB’s Pontes project is set to launch in September 2026, aiming to anchor DLT settlement in central bank money.
- Lagarde warned that euro stablecoins could narrow the ECB’s monetary policy transmission channel by shifting retail deposits away from banks.
Lagarde’s remarks at the Banco de España Latam Economic Forum highlighted concerns about financial stability and monetary policy transmission linked to euro-denominated stablecoins amidst a heavily dollar-dominated market.
With the stablecoin market primarily tied to the U.S. dollar, Lagarde emphasized potential risks over benefits for euro stablecoins, urging focus on central bank-anchored solutions like the upcoming Pontes project. (Source )
