Lagarde warns stablecoin rise threatens monetary sovereignty

European Central Bank (ECB) President Christine Lagarde has voiced strong concerns over the growing adoption of stablecoins, arguing they pose risks to monetary sovereignty and policy effectiveness.
Speaking at a central bank meeting in Portugal on Tuesday, Lagarde stated that stablecoins, in their current form, should not be treated as money.
She criticised the confusion between money, payment instruments, and underlying infrastructure—an issue she says has been amplified by modern technologies.
“We are falling prey to some confusion between money, means of payment, and payment infrastructure,” Lagarde said.
Lagarde pointed out that stablecoins are issued by private firms such as Tether and Circle, and this raises fundamental questions about the nature of money as a public good.
She warned that stablecoin proliferation could lead to the “privatisation of money,” a development she sees as incompatible with the public mandates of central banks.
The ECB president said the rise of privately issued digital currencies may weaken central banks' ability to enforce effective monetary policy.
Stablecoins, often pegged to fiat currencies, can act as de facto substitutes for sovereign money without adhering to the same regulatory frameworks.
Lagarde reinforced that central banks are not appointed to enable such privatisation and that doing so would harm the integrity of public financial systems.
She said stablecoins might blur the boundaries between public and private forms of money, potentially undermining trust in state-backed currencies.
To counter these developments, the ECB has been developing the digital euro, a central bank digital currency (CBDC) designed to ensure Europe’s monetary sovereignty.
Lagarde described the digital euro as a tool for safe, sovereign-aligned digital payments, offering a regulated alternative to private stablecoins.
In June, the ECB confirmed that the digital euro is technically ready for launch, pending regulatory approval.
The rollout is part of the broader effort by the ECB to future-proof European financial infrastructure while preserving control over monetary levers.
Lagarde’s remarks reflect growing unease among central bankers worldwide over stablecoins’ disruptive potential.
Her comments add to the regulatory discourse as global institutions grapple with how to balance innovation, consumer protection, and state authority in the digital finance era.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Russia creates cryptocurrency mining registry to regulate sector
Strategy prepares sale of US$ 4,2 billion in STRD to buy bitcoin
Core Scientific to be acquired for $9 billion in stock by CoreWeave
Trending news
MoreCrypto prices
More








