On Monday 23 June, the President of the European Central Bank (ECB), Christine Lagarde, urged MEPs to accelerate the legislative work needed to introduce the digital euro.
“Accelerating progress towards a digital euro is a strategic priority. Beyond addressing some of the risks posed by stable coins, a digital euro (...) would not only strengthen Europe’s strategic autonomy, but it would also ensure an innovative and resilient European retail payments system”, said Ms Lagarde during a monetary dialogue with the European Parliament’s Committee on Economic and Monetary Affairs.
Aware of the “passionate” debates that this project is provoking within Parliament, she recalled the advantages that the digital euro project is supposed to bring. This dematerialised central bank currency will be “free” and available for any digital payment solution in all euro area countries. There is no competing solution combining these criteria, she stressed, trying to reassure Fernando Navarrete Rojas (EPP, Spanish), the rapporteur for this dossier.
Convinced of the importance of moving forward with this project, Gilles Boyer (Renew Europe, French) asked Ms Lagarde about the costs to banks of implementing the digital euro, which a study by PwC estimated at between €18 and €30 billion. The former head of the IMF questioned this figure, noting that the methodology of the study had not been shared. “The ECB will keep costs as low as possible” and these costs, which will depend on the arrangements for the digital euro, will be “borne entirely by the Eurosystem, as is the case for banknote printing”, she stressed.
Damian Boeselager (Greens/EFA, German) asked Ms Lagarde about a possible risk to financial stability that would emerge from a situation where Americans and Europeans issue the same ‘stable coin’ (‘double issuance’). In such a hypothetical scenario, in the event of a redemption request targeting cryptocurrencies issued in the United States, it would be more attractive to seek this redemption in Europe, where no fees are applied, thereby exposing the European collateral associated with the cryptocurrency, the ECB President said. She therefore advocated a “narrow interpretation” of EU rules to address “loopholes” in the regulatory framework and “eliminate potential risks”.
To see Mrs Lagarde’s speech: https://aeur.eu/f/HJ6 (Original version in French by Mathieu Bion)