Christine Lagarde, President of the European Central Bank (ECB), warned that euro-denominated stablecoins could also threaten financial stability and the monetary policy transmission mechanism. According to Bloomberg, President Lagarde stated, "The effects of reducing financial funding costs and expanding international influence from euro stablecoins are merely short-term benefits, and the cost is greater. If the goal is to strengthen the international status of the euro, stablecoins are not an efficient means." She also emphasized, "Europe's challenge is not to imitate tools developed in other regions, but to build a safe asset base commensurate with capital market integration and the status of the euro." Earlier in February, Joachim Nagel, President of the German Central Bank, expressed support for euro stablecoins, but in a March working paper, the ECB pointed out that widespread adoption of stablecoins could pose significant risks to Eurozone banks and monetary sovereignty.
