MILAN, Jan 29 (Reuters) - The euro zone needs to be self-sufficient in handling payments and the digital euro will provide the necessary ​infrastructure for retail transactions, European Central Bank Executive Board Member Piero ‌Cipollone said on Thursday. The ECB is working on a digital version of the single currency to ‌maintain the central bank's core role in an increasingly digital economy and defend the euro zone's monetary sovereignty. Speaking remotely at a conference in Italy, Cipollone said t ...

Core Insights - The International Monetary Fund (IMF) has released a report highlighting the risks associated with stablecoins, advocating for Central Bank Digital Currencies (CBDC) as a solution to maintain monetary control [1][2] Group 1: Risks of Stablecoins - The IMF report states that currency substitution through stablecoin adoption threatens monetary sovereignty, impacting a country's control over its currency and monetary policy [2] - The report emphasizes that central bank money is essential as the most basic, liquid, and resilient form of money, which should continue to play its role in the economy [2] - The IMF warns that under certain conditions, such as fire sales, central banks may need to intervene, which could jeopardize financial stability [2] Group 2: Perspectives on Stablecoins - Kevin Lee, Gate CBO, argues that the narrative of 'substitution risk' overlooks the potential for private stablecoins and CBDCs to coexist, suggesting a more conciliatory approach [2] - Erbil Karaman, co-founder of Huma.Finance, asserts that the benefits of stablecoins outweigh the concerns, particularly for individuals in unstable fiat economies who are adopting stablecoins for financial liberation [3] - The IMF highlights the lack of regulatory compliance in the crypto industry, making it susceptible to illegal activities such as money laundering and terrorist financing due to the pseudonymity and low transaction costs of stablecoins [4] Group 3: Broader Implications - A report from the U.S. Treasury indicates that the U.S. dollar is also used for transporting and laundering illicit proceeds, suggesting that concerns about stablecoins may apply to traditional currencies as well [5] - Ricardo Salinas Pliego, a billionaire entrepreneur, claims that the anti-crypto campaigns reflect the fear of established financial institutions losing their power and control over money [6]

Core Insights - Stablecoins have the potential to enhance access to financial services for individuals, but they may pose risks to central banks and financial sovereignty according to the International Monetary Fund (IMF) [1][2] Group 1: Impact on Financial Sovereignty - The IMF identifies "currency substitution" as a risk associated with stablecoins, which could gradually erode the financial sovereignty of nations [1] - The use of foreign currency-denominated stablecoins, particularly in cross-border transactions, may undermine monetary sovereignty, especially with the presence of unhosted wallets [2][3] - A significant shift in economic activity away from a nation's currency could reduce a central bank's control over domestic liquidity and interest rates [3] Group 2: Competition with Central Bank Digital Currencies (CBDCs) - Foreign currency-denominated stablecoins could become entrenched in payment services, making it difficult for local alternatives like CBDCs to compete [4] - CBDCs are defined as digital forms of sovereign currency issued and managed by central banks, contrasting with privately issued stablecoins [4] Group 3: Current Market Dynamics - As of now, stablecoins denominated in U.S. dollars account for 97% of the $311 billion stablecoin market, with euro-denominated stablecoins valued at $675 million and those linked to the Japanese yen at $15 million [5] - The IMF notes that stablecoin adoption is increasing in regions such as Africa, the Middle East, Latin America, and the Caribbean, which may affect central banks' ability to influence monetary policy [4] Group 4: Recommendations for Safeguarding Monetary Sovereignty - To protect monetary sovereignty, the IMF recommends that countries establish frameworks to prevent digital assets from being recognized as official currency or legal tender [6]

Core Viewpoint - France's National Assembly has adopted a resolution opposing the European Central Bank's proposed digital euro, advocating instead for Bitcoin and euro-denominated stablecoins as alternatives [1][2]. Group 1: Legislative Actions - The resolution was introduced on October 22, 2025, by Éric Ciotti and members of the Union of the Right for the Republic (UDR), urging the French government to reject the European Commission's draft regulation for a digital euro [2]. - The proposal emphasizes the need for greater national investment in crypto-assets and support for euro-based stablecoins [2]. Group 2: Concerns Over Central Bank Digital Currencies (CBDCs) - The document titled "Proposal for a European Resolution Calling for Support for the Transformation of the Monetary System" argues that CBDCs threaten privacy and economic freedom [3]. - Lawmakers expressed concerns that a centrally managed digital euro could allow authorities to track and freeze citizens' funds, drawing comparisons to China's digital yuan [4]. Group 3: Economic Implications - The resolution warns that a digital euro could destabilize Europe's banking system by enabling users to transfer deposits directly to the ECB, potentially leading to a bank run [5]. - It argues that such concentration of financial power within a single institution would be detrimental to economic freedom [5]. Group 4: Proposed Initiatives - The French proposal outlines a pro-crypto agenda focusing on three areas: establishing a national Bitcoin reserve, promoting euro-denominated stablecoins, and supporting the domestic crypto industry [5]. - The plan includes creating a public administrative body to manage a strategic Bitcoin reserve equivalent to 2% of the total Bitcoin supply, approximately 420,000 BTC, to be accumulated over seven to eight years [6].

Core Viewpoint - The People's Bank of China (PBoC) has issued a strong warning against stablecoins, labeling them a threat to global financial stability and committing to intensifying its crackdown on domestic cryptocurrency activities [1][2]. Group 1: Stablecoins and Financial Stability - Pan Gongsheng, governor of the PBoC, stated that stablecoins, which are digital assets pegged to fiat currencies, have introduced new vulnerabilities into the global financial system and could undermine the monetary sovereignty of smaller economies [2][5]. - He emphasized that stablecoins have exacerbated weaknesses in the global financial system, particularly through their involvement in market speculation and non-compliance with essential regulations such as customer identification and anti-money laundering (AML) standards [3][4]. - The PBoC's measures against cryptocurrency activities have been described as "effective," maintaining a zero-tolerance policy towards private digital currencies since 2017 due to financial risks and potential consumer harm [4]. Group 2: Regulatory Actions and Future Monitoring - The central bank plans to continue collaborating with law enforcement to combat cryptocurrency operations and speculative activities within mainland China [3]. - Pan indicated that the PBoC would closely monitor the development of stablecoins in overseas markets, reflecting concerns about how foreign stablecoin growth could impact China's financial stability [5]. - The total market capitalization of stablecoins has reached approximately $308 billion, with Tether (USDT) and USD Coin (USDC) making up nearly 87% of the supply, highlighting the significant presence of these assets in the market [6].