ECB President: We must stay ahead of the game …
ECB President: We must stay ahead of the curve in the stablecoin space
European Central Bank President Christine Lagarde believes that financial institutions need to be at the forefront of innovation when it comes to stablecoins, writes Reuters.
“My personal conviction with regard to the issue of stablecoins and secondarily bitcoin is that we better stay ahead of the game. There is an obvious demand that we need to respond to, ”she said at today’s meeting of the ECB Board of Governors, dedicated to the issue of the key rate and monetary policy..
According to Lagarde, the ECB needs to set targets for the digital currency working group by the first half of 2020. Before going into technical details, the ECB needs to understand what goals it wants to achieve with its project..
“Are we trying to keep costs down? Are we trying to get rid of middlemen? Are we trying to make financial services publicly available at no additional cost? There are a number of goals to which you can go, “- said the President of the ECB.
Previously, ECB members have already taken part in discussions about the pros and cons of launching their own digital currency, which can become a cheap and quick means of payment, but at the same time will have significant consequences for the financial system and the policies of the central bank itself. For example, deposit holders are highly likely to convert their assets to digital currency during times of economic uncertainty, potentially devastating banks..
One of the advantages of such a currency is the emergence of the ECB’s ability to directly add liquidity to the real economy, bypassing the financial sector and making its policy more effective..
Earlier, Lagarde, as head of the International Monetary Fund, stated that cryptocurrencies are shaking the banking system..
“I believe that disrupters and anything that uses distributed ledger technology, call them crypto, assets, currencies, whatever you want, is clearly shaking the system,” she said. “We do not need innovations that will pump the system so hard that we will lose the necessary stability.”.
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