Stablecoins threaten banking system: ECB chief
ECB chief fears stablecoin dominance
Mass adoption of private digital currencies can disrupt banking business, considers Lagarde
ECB will accept all forces for preserving the sovereignty of the euro even in the digital space
International consortium news organizations, developing transparency standards.
Central bank of the euro area intends make every effort to preserve the usefulness of fiat currency even in the digital age
The European Central Bank (ECB) has an interest in keeping the euro useful even in the digital environment. About this in an interview with the Alumni Association of the National School of Administration, said regulator Christine Lagarde. She admitted that consumers around the world actively switch to non-cash payments.
The head of the ECB notes that the coronavirus pandemic in 2020 year accelerated the transition to contactless payments in stores. Referring to an internal ECB survey conducted in 2019 year, Lagarde announced the upcoming development of technological innovation and growth competition in market financial services.
Blockchain is a risk
According to Lagarde, central bank money more functional and reliable than private stablecoins. Digital euro, by opinion head of the ECB, will provide unlimited access to simple, virtually risk-free and reliable means of payment.
“The digital euro will complement cash money and ensures that consumers continue to will be have unlimited access to the money central a bank in a form that meets their growing digital payment needs, ”Lagarde said.
The head of the ECB believes that a “well-designed” digital euro will create synergies with the payments industry and allow the private sector to form new businesses based on services related to digital currency. Also Lagarde believes that technology blockchain open up new opportunities, but wherein carry certain risks.
“Rely exclusively on technology and the erroneous concept of the absence of an identifiable issuer, it is very risky “, – says Lagarde.
Stablecoins also fail of all functions of money, Lagarde believes. They are solve the problem of high volatility of traditional cryptocurrencies, but create new risks associated with the reliability of the issuer.
The President of the European Central Bank is confident that if stablecoins become widespread, “may threaten financial stability and monetary sovereignty “, especially in Tom case, if the issuer will not be able to maintain a stable value of the asset, or cover by potential losses.
More Togo, massive use of stablecoins in quality funds saving can lead to an outflow of bank deposits, which will affect the operational activities of the banking sector and the implementation of monetary policy.
Lagarde recalled that the regulator continues to assess the risks and benefits of issuing a digital euro, which from a legal point of view will be the responsibility of the central bank.
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