ECB Warning: Stablecoins Could Cause Countries to Lose Monetary Control

At a meeting in Portugal, the President of the European Central Bank (#ECB ) — Ms. Christine Lagarde — raised concerns about the risks posed by stablecoins. She believes that stablecoins, such as Tether's USDT or Circle's USDC, are issued by private companies rather than by governments. This makes it difficult for central banks to control monetary policy, as stablecoins can operate in parallel with 'real money'.

Ms. Lagarde explained: many people confuse stablecoins with fiat currency, and this is even more likely to happen as technology develops too quickly. If stablecoins become overly popular, people may withdraw money from traditional banks, weakening the ability to manage interest rates, monetary policy, and impacting the economy.

The Governor of the Bank of England, Mr. Andrew Bailey, also agrees. He believes that stablecoins 'like money' must comply with strict regulations to maintain stable value.

However, the U.S. Fed is more open. Chairman Jerome Powell said that the U.S. is nearing the issuance of specific regulations for stablecoins and sees this as a positive step to manage risks.

📈 The context of the EUR is also strengthening, with the EUR/USD exchange rate rising from 1.0178 on 13/01/2025 to 1.1829 on 01/07/2025, according to data from platform #NEOTECH . This indicates that the Euro is regaining strength, but stablecoins remain a major concern as they could undermine the role of traditional currencies.