ECB president confirms digital euro plans as inflation rises to 3.8%
European Central Bank (ECB) President Christine Lagarde said preparations for a digital euro designed for everyday payments are continuing, while emphasizing the resilience of the eurozone economy. However, the regulator expects rising energy prices to keep inflation above its target until mid-2027.
Lagarde made the remarks on October 17 during the annual meetings of the International Monetary Fund (IMF). According to her, eurozone inflation reached 3.8% in September, mainly due to higher energy costs.
The ECB expects energy-related pressures to ease next year. Despite inflation temporarily exceeding the 2% target, Lagarde believes a measured approach to monetary policy remains appropriate.
Digital euro will complement cash payments
Lagarde confirmed that the ECB is continuing preparations for the digital euro, which is intended for everyday transactions. The new form of central bank money is designed to complement cash rather than replace it.
"The digital euro will further stimulate innovation and competition in retail payments," the ECB president said.
According to Lagarde, the coexistence of public and private payment solutions will strengthen Europe's strategic autonomy. This is particularly important for developing the European Union's own payment infrastructure.
Meanwhile, the ECB is developing settlement technologies for tokenized assets. In September, the regulator launched Pontes, a system that allows financial institutions to settle such transactions using central bank money.
The platform initially offers a limited range of services. Full implementation is expected by 2028, with one of its objectives being to provide an alternative to private settlement instruments, including stablecoins.
European Union tightens stablecoin regulations
The development of the digital euro comes amid increased oversight of the EU cryptocurrency market. European regulators are seeking to ensure that digital asset issuers and service providers comply with common regulatory requirements.
The Markets in Crypto-Assets Regulation (MiCA) remains the foundation of the regulatory framework, establishing rules for issuing and circulating stablecoins across the European Union.
On October 8, the European Securities and Markets Authority (ESMA) instructed cryptocurrency companies to gradually discontinue services involving stablecoins that do not comply with MiCA requirements.
Companies have been given three months to comply. National regulators must ensure that the necessary measures are implemented by January 8, 2027, potentially restricting European users' access to certain digital assets.
Earlier, we reported that the European Union recognized the USDC stablecoin as systemically important under the MiCA regulatory framework. The decision reflects the growing role of regulated digital assets in Europe's financial system.
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