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Sujha Sundararajan
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The European Central Bank (ECB) has signalled that a digital euro is ready to roll out and is now awaiting legislative action from the European Parliament and the Commission.
Addressing this year’s final press conference on Thursday, ECB President Christine Lagarde said that the digital euro is technically ready.
“We have done our work, we have carried the water,” Lagarde noted. “But it’s now for the European Council and certainly later on for the European Parliament to identify whether the Commission proposal is satisfactory, how it can be transformed into a piece of legislation or amended.”
In September, ECB’s Executive Board member Piero Cipollone set a realistic timeline for digital euro rollout around mid-2029, calling it “a fair assessment.”
He said at the time, “Discussion at the level of member-states is going very well.”
Now, with the authorities stressing that the preparatory systems are built, attention is shifting to political institutions to authorize.
“We place great hopes in the work that will be done in Parliament, once the Council has determined its views,” Lagarde added.
Along with her counterparts from other EU nations, Lagarde has been a “very strong” supporter of this initiative.
MiCA-Compliant Stablecoins Are Regarded as Safe: ECB President
During the Q&A session, the ECB head dismissed that stablecoins are a threat to Europe’s monetary sovereignty, when the asset class comes under Europe’s Markets in Crypto-Assets Regulation (MiCA).
“We are lucky in Europe to have something that is called MiCAR,” Lagarde said. “It’s the legal framework within which instruments like stablecoins can work and can be supervised and can be regarded as safe.”
Besides, she added that regulated stablecoins are “an alternative form of payment,” which might have its own benefits.
She also pressed the potential risks around multi-issuance currency for stablecoins, which potentially exposes the reserves.
“So on that particular area, I think that we need to be extremely attentive to what the potential risks are for the system itself and for the holders of stablecoins.”
Digital Euro to Exist Alongside Fiat Money
At the meeting, President Lagarde stressed that the ECB does not aim to be a role model for digital euro. Instead, “to make sure that in the digital age, there is a currency that is the anchor of stability for the financial system.”
She reaffirmed ECB’s commitment to keeping euro cash widely available, emphasizing that a digital euro is to complement and not replace fiat money. “In addition to making sure that it is user-friendly, not costly, fast, efficient, private, that it can work online, offline,” she noted.
Further, she addressed a data-driven approach to interest rate decisions, adding that inflation is projected to meet the ECB’s 2% target by 2028.
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