The President of The European Central Bank (ECB), Christine Lagarde, has issued a clear statement regarding the organization’s feelings toward cryptocurrencies and stablecoins in particular. The European Central Bank governs and manages the financial and economic interests of the nineteen European Union (EU) countries that have adopted the ‘Euro’ currency.
In a recent press conference regarding monetary policy, the ECB’s position in relation to developments in the stablecoin market was brought to light. During a short speech about cryptocurrencies in general, Lagard noted that the organization recognizes the impact, and possible threat, that stablecoins pose:
“My personal conviction is that given the developments we are seeing, not so much in the bitcoin segment but in the stablecoins projects, we had better be ahead of the curve,” Lagard stated, after noting that Canada, the UK, and “certainly other countries” are already looking into stablecoin technology. The words seems to indicate that the ECB feels it may be left behind by stabelcoin projects that already exist if it doesn’t begin investigating their potential.
“There is clearly a demand out there that we have to respond to,” Lagard concluded.
Exactly how the ECB plans to respond is unclear but some commentators believe the organization will be looking into developing their own versions of stable digital currencies. Tuur Demeester of Adamant Capital is just one voice that feels the ECB may be looking into creating stablecoins of its own. “Looks like the ECB will be entering the stablecoin business,” he mused in a recent tweet.
An ECB Stabelcoin project?
Lagard also mentioned that a G7 working group headed by Benoit Coeure of the Committee on Payments and Market Infrastructures (CPMI) was already looking into the risks and benefits presented by stablecoins. The group has penned a white paper titled “Investigating the impact of global stablecoins” that could very well be the first official foray by a major global financial institution into the world of cryptocurrencies.
Unlike those from typical blockchain firms, the white paper doesn’t present the basis for a cryptocurrency project but rather examines the legal, financial, and governmental implications of stablecoins. Whether or not this means that Europeans will be using a ‘Euro’ stablecoin anytime soon is yet to be seen.
The cryptocurrency market remains down this month, dropping from $205 billion in earlier December to current levels around $195 billion. Analysts believe the current downtrend could continue further, with some seeing the price of Bitcoin (BTC) potentially hitting a low of $6,400.