Digital Euro Poised for Progress, Awaits Legislative Review: Insights from ECB President Christine Lagarde

The European Central Bank (ECB) has announced that the digital euro is technically ready for launch, pending legislative approval from the European Parliament and Commission. ECB President Christine Lagarde emphasized the importance of this digital currency as a stable anchor for the financial system, and she reassured that the ECB aims to maintain availability of cash alongside the new digital option.

Key Takeaways

The digital euro is ready for rollout, awaiting approval from European Parliament and Commission.
ECB President Christine Lagarde highlights the digital euro's role in enhancing financial stability.
Stablecoins, under the MiCA regulation, are seen as safe alternatives by the ECB.
The digital euro is intended to complement, not replace, traditional fiat currency.

ECB digital euro

Digital Euro Ready for Launch: Awaiting Legislative Approval

The European Central Bank (ECB) has indicated that it is prepared to advance the digital euro, now pending essential legislative actions from the European Parliament and the Commission. In her address during the ECB's final press conference of the year, President Christine Lagarde stated that the technical groundwork for the digital euro has been completed.

"We have done our work; we have carried the water," Lagarde affirmed. "It is now up to the European Council and later the European Parliament to assess whether the Commission's proposal meets their requirements and how it can be shaped into legislation."

In September, Piero Cipollone, a member of the ECB's Executive Board, provided a timeframe suggesting that the rollout of the digital euro could realistically occur around mid-2029, describing this as “a fair assessment.” He remarked that discussions among member states have been progressing positively.

Now that the preparatory systems are in place, the focus is shifting towards political bodies to grant the necessary approvals. Lagarde expressed optimism regarding the Parliament's role once the Council has articulated its position.

Alongside her peers from other EU nations, Lagarde has firmly supported the digital euro initiative.

ECB President Assures Safe Position for MiCA-Compliant Stablecoins

During the question-and-answer portion of the conference, Lagarde addressed concerns regarding stablecoins, stating that they do not pose a threat to Europe’s monetary sovereignty. This reassurance comes as the asset class will come under Europe’s Markets in Crypto-Assets Regulation (MiCA).

“We are fortunate in Europe to have MiCAR,” Lagarde stated. "This framework will allow stablecoins to operate under supervision and be considered safe."

Moreover, she highlighted that regulated stablecoins can serve as "an alternative form of payment," offering potential benefits. However, she emphasized the importance of understanding the risks related to multi-issuance currencies for stablecoins, which could impact their reserves and the overall financial system.

Digital Euro to Function Alongside Traditional Currency

Lagarde reiterated that the ECB does not seek to set a precedent with the digital euro. The goal is to ensure that in today’s digital era, there is a reliable currency that serves as a stable anchor for the financial system.

She reaffirmed the ECB's dedication to keeping euro cash widely accessible, clarifying that the digital euro is intended to complement rather than replace fiat money. "We want to ensure that it remains user-friendly, cost-effective, fast, efficient, and private, and that it functions effectively both online and offline," she explained.

Additionally, Lagarde discussed a data-driven approach toward interest rate decisions, projecting that inflation could meet the ECB's target of 2% by 2028.