European Central Bank Will Look Into Stablecoins, Needs To 'Get Ahead Of The Curve:' Lagarde

The European Central Bank will establish clear objectives for its digital currency task force by mid-2020, the bank's president Christine Lagarde said in on Thursday.

What Happened

Lagarde, who was holding her first-ever press conference as the president of ECB, said that there is a clear demand for "stablecoins," and the bank needs to stay ahead of that demand.

Stablecoins are asset-backed cryptocurrencies whose value isn't supposed to fluctuate significantly with time.

"My personal conviction is that, given the developments we are seeing, not so much in the bitcoin segment but in the stablecoins projects, and we only know of one at the moment but there are others being explored and underway at the moment," she told the press, as reported by The Block.

"We'd better be ahead of the curve, if that happens. Because there is clearly demand out there that we have to respond to."

Why It Matters

Lagarde's comments come at a time when the People's Bank of China has reportedly started testing its digital currency.

ECB expressed its interest in developing its own digital currency in November.

The bank said that the use of cash was still prevalent in the E.U., but if that were to change, it would consider "accelerating" its efforts in working on a digital currency.

Lagarde's predecessor at ECB, Jean-Claude Trichet, was more skeptical of cryptocurrencies, and bitcoin in particular, which he previously referred to as "not real" and "pure speculation."

Lagarde told the press that the bank would function differently under her leadership.

"I will have my own style," she told the press, as reported by The New York Times. "Don't over-interpret. Don't second guess. I'm going to be different."
Photo Credit: World Economic Forum via Wikimedia