PANews reported on May 23 that, according to Reuters, three sources revealed that the European Central Bank (ECB) warned EU finance ministers on Friday that proposals to issue more euro-denominated stablecoins could reduce bank lending and make interest rate control more difficult. The Brussels-based economic think tank, the Bruegel Institute, prepared a report for the EU's top financial policymakers calling for relaxed liquidity requirements for cryptocurrency issuers and potentially allowing them access to funding from the ECB. The goal is to develop a stablecoin market in Europe, currently dominated by dollar-denominated tokens. However, sources said other central bank officials, including ECB President Christine Lagarde, immediately opposed the move. They feared such measures would make bank deposits more volatile, weakening this vital sector of the economy and reducing the central bank's ability to control interest rates.
