During a panel at the ECB Forum in Sintra, running until Wednesday, central bank governors discussed digital currencies and stable coins, notably after South Korea decided to suspend its central bank digital currency project.
Christine Lagarde emphasized that there is “some confusion between money, means of payment, and payment infrastructures,” which is “highlighted by the technologies used.”
“I see money as a public good, and we [central bankers] are public servants, and my fear is that the distortion of the lines might lead to the privatization of money, and that is not the goal of the work we have been doing,” she stated.
Lagarde warned of the risks of “weakening the sovereignty of regions that inadvertently become subject to using means of payment” without rules, stressing that a policy on the matter should be determined.
The Governor of the Bank of Korea highlighted concerns about dollar-denominated stable coins that are not regulated and could undermine the existing regulatory framework.
Chang Yong Rhee added that while some claim the new blockchain technology can identify irregular transactions, “there is no certainty that this is true,” and concerns about these new digital currencies persist.
