ECB's Lagarde Warns Against U.S. Stablecoin Model

European Central Bank President Christine Lagarde cautioned against Europe adopting a stablecoin model similar to the U.S., citing significant financial stability risks. She highlighted that large stablecoins, dominated by U.S. dollar-pegged tokens like Tether and USDC, pose threats and could transmit market stress during turmoil. Lagarde urged Europe to prioritize developing tokenized settlement infrastructure anchored in central bank money rather than relying on privately issued stablecoins. This stance comes as a consortium of European banks plans to launch a digital euro, but the ECB is targeting a potential central bank digital currency rollout by 2029.