European Central Financial institution (ECB) president Christine Lagarde is stepping down someday earlier than the French presidential election subsequent yr.
Below her management, the ECB has consulted on the Markets in Crypto Belongings (MiCA) laws that outlined the crypto panorama within the European Union. The preeminent European financial institution additionally started work on the digital euro — the following iteration of the Eurozone’s forex.
However there’s nonetheless work to be performed on crypto coverage in Europe. MiCA doesn’t, in its present type, regulate decentralized finance (DeFi), and policymakers on the ECB are nonetheless deliberating over the digital euro’s remaining particulars.
Whereas the precise timing of Lagarde’s departure has not but been decided, observers are already speculating about who will take her place and the way it will have an effect on crypto coverage in Europe.
Lagarde was a crypto-skeptic, crucial of stablecoins
Like many central bankers, Lagarde has been cautious at finest in the case of cryptocurrencies. In 2022, she said relating to crypto, “My very humble evaluation is that it’s value nothing.”
“It’s primarily based on nothing … There is no such thing as a underlying asset to behave as an anchor of security.”
She mentioned that crypto needs to be regulated, citing concern that traders didn’t perceive the dangers related to crypto investing and would “lose all of it.”
This set the tone for the ECB consultations on MiCA that will observe. The ECB itself doesn’t create legal guidelines, however all through the legislative course of, the ECB suggested, noticed and offered feedback, significantly over areas associated to financial coverage and funds rules.
Even after MiCA was handed, Lagarde advocated for tight rules on stablecoins and aligning worldwide requirements. In September 2025, she known as on lawmakers in Europe to offer safeguards for stablecoins and equivalence for overseas stablecoin issuers to stop the danger of stablecoin runs.
“European laws ought to be sure that such schemes can’t function within the EU except supported by sturdy equivalence regimes in different jurisdictions and safeguards referring to the switch of property between the EU and non-EU entities,” she mentioned.
“This additionally highlights why worldwide cooperation is indispensable. With no stage international taking part in discipline, dangers will all the time search the trail of least resistance.”
She additional stated that stablecoins are a menace to nationwide sovereignty and switch cash from a public good right into a privately managed enterprise.
“When stablecoins are left unchecked, we threat making a system by which cash is managed by the non-public sector. That isn’t the mandate we have been appointed to function public servants.”
Demand for digital money and the euro
Whereas a famous crypto skeptic, Lagarde acknowledged the demand for digital currencies again in 2021. In an interview that yr on the World Financial Discussion board, Lagarde mentioned, “If prospects want to make use of digital currencies slightly than have banknotes and money out there, it needs to be out there.”
“We must always reply to that demand and have an answer that’s European primarily based, that’s safe, that’s out there, and pleasant phrases that can be utilized as a way of cost.” On the ECB stage, this response took the type of the digital euro.
However the wheels of Brussels don’t flip shortly. The investigation part for a digital euro started all the best way again in October 2021. In October 2025, the ECB accomplished the preparation part when its governing council decided to begin getting ready for issuance.
The digital euro has confronted harsh criticism, particularly that it’s going to give central banks one more software to watch client habits, management spending and eradicate nameless transactions. There have additionally been issues over offline operability and overreliance on digital programs.
The ECB claims that the digital euro could have strict privateness requirements and that it’s going to deliver all the identical advantages of money to the digital financial area. In October 2025, Lagarde mentioned that the ECB wants to make the euro “match for the long run, redesigning and modernising our banknotes and getting ready for the issuance of digital money.”
Her colleague, ECB government board member Piero Cipollone, iterated that the digital euro “will be sure that folks get pleasure from the advantages of money additionally within the digital period. In doing so, it should improve the resilience of Europe’s cost panorama, decrease prices for retailers, and create a platform for personal firms to innovate, scale up and compete.”
New ECB frontrunners unlikely to depart from cautious stance
Lagarde’s choice to step down comes at a politically fraught time. Leaving earlier than the following French presidential election will enable President Emmanuel Macron to take part in selecting her alternative.
France is the second-largest financial system within the EU, and in accordance with Reuters, no ECB president has been picked and not using a nod from Paris.
The precise-wing Nationwide Rally has been ascendant within the polls just lately, whereas Macron has failed to supply secure governance, with seven totally different prime ministers serving below his tenure. Nationwide Rally president Jordan Bardella claims that, in selecting a brand new ECB president, Macron would be capable of train affect past the tip of his official time period.
Based on the Monetary Instances, the present frontrunners to replace Lagarde are former Spanish central financial institution governor Pablo Hernández de Cos and former Dutch central financial institution governor Klaas Knot.
In 2022, Hernández de Cos said at a Financial institution of Worldwide Settlements (BIS) convention that crypto can “pose extremely important dangers which are onerous to grasp and measure, even for probably the most skilled brokers.”
He known as for a strong regulatory framework to transition crypto from “that hyperbolic ‘Wild West’ delusion to a extra fascinating orderly ‘railroad of civilisation.’”
Knot has been equally cautious. Talking earlier than the BIS in 2024, he acknowledged the doable advantages of sure elements of blockchain know-how.
Associated: How euro stablecoins could address EU’s dollar concerns
“Making a digital illustration of an asset and inserting it on a distributed ledger might deliver advantages to the monetary system. This contains effectivity positive aspects and probably elevated liquidity of sure property. After all, there may be dangers for monetary stability.”
Nonetheless, he careworn the regulators have been assessing the implications these applied sciences would have on broader monetary stability, stating that, “We can’t presume that this innovation, and probably extra decentralization, will deliver important advantages to the worldwide monetary system.”
In June 2025, he addressed stablecoins particularly. Knot said that whether or not the following type of cash comes by way of stablecoins or already established cost networks “needs to be one thing we’re agnostic on.”
Whereas impartial on the style of know-how supporting monetary innovation, he mentioned that “fostering innovation should not come on the expense of stability.”
Whereas usually criticized for the glacial tempo of progress, the EU managed to move a complete crypto framework sooner than the way more crypto-friendly United States. This framework included steering and enter from a crypto-cautious central financial institution, with a skeptic on the helm.
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