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European Central Bank president Christine Lagarde is warning that stablecoins pose serious liquidity risks unless policymakers close loopholes that let foreign issuers skirt EU rules. “We know the dangers,” she said i n prepared remarks for the European Systemic Risk Board conference. “And we do not need to wait for a crisis to prevent them.” Lagarde highlighted concerns over “multi-issuance schemes,” where stablecoins are jointly issued by entities inside and outside the EU. She said such schemes could leave European investors exposed in a run, since non-EU issuers aren’t bound by the bloc’s Markets in Crypto Assets (MiCA) framework, which mandates safeguards like prohibiting redemption fees. “In a crisis, investors would naturally prefer to redeem in the jurisdiction with the strongest safeguards,” she said. “But the reserves held in the EU may not be sufficient to meet such concentrated demand.” She compare...

“There is no clear evidence that underlying inflation has peaked,” Lagarde said Thursday in a speech in Hanover, Germany. “We have made clear that we still have ground to cover to bring interest rates to suffiECciently restrictive levels,” she added. advertisement ECB likely to increase interest rates one more time The central bank’s President spoke shortly after data showed inflation in the 20-nation euro zone slowed markedly last month, indicating that the toughest monetary-tightening campaign of the euro era can soon draw to a close. However, Lagarde said that there is no clear evidence of that yet, signaling more rate hikes in the coming months. Core price pressures indicate that there’s probably still at least one more hike to come to ensure the 2% inflation target is reached. ECB Vice President Luis de Guindos said Wednesday that he “could not say that the victory is there so far.” Fellow rate-setter Madis Mul...