ECB Executive Member Fabio Panetta discussed the potential advantages of stablecoins and their implications for the payments market, the financial sector and the overall economy.
Panetta said that stablecoins are "an expression of the need for change".
Stablecoins could help innovation in payments, including drive cheaper and more efficient cross-border payments and remittances.
However, the "flipside" is that stablecoins do pose risks to social and economic life, including in relation to privacy, competition, anti-money laundering, terrorist financing, tax evasion, cyberattacks, as well as financial stability and monetary sovereignty.
"Another concern is that wide acceptance of stablecoins offered by foreign companies would make European payments dependent on technologies designed and governed elsewhere," he said.
Panetta also reviewed how the Eurosystem is responding to the transformation of the payments landscape and the policies and regulation being put in place, including:
- the Eurosystem retail payments strategy;
- the potential introduction of the digital euro;
- a consultation on a new framework for electronic payment instruments, schemes and arrangements (the PISA framework; and
- the Regulation on Markets in Crypto-assets (Mica).
"A multi-sectoral response from central banks, financial regulators, data protection authorities and competition authorities is necessary," Panetta said.