ECB’s Lagarde Highlights Inflation Outlook and Progress on Digital Euro
European Central Bank President Christine Lagarde reported that eurozone inflation hit 3.8% in September, mainly due to elevated energy prices. The ECB anticipates these energy costs will decrease next year, easing inflationary pressures.
Lagarde spoke about the eurozone's economy and the development of a digital euro at the IMF Annual Meetings.
She emphasized that despite an expected energy shock keeping inflation above the ECB’s target into the first half of 2027, a balanced policy response remains appropriate. This statement was part of her remarks at the IMF’s annual forum on Saturday.
Lagarde confirmed that the ECB is working on creating a digital euro. She explained that the digital euro will complement cash in everyday retail transactions, fostering innovation and competition in retail payments while supporting Europe’s strategic independence in payment systems through coexistence of public and private solutions.
On September 21, Cointelegraph reported that the ECB introduced Pontes, a platform enabling financial institutions to settle wholesale tokenized asset transactions using central bank money. This offers an alternative to private settlement methods like stablecoins.
Pontes currently provides a fundamental set of features, with the full rollout planned by 2028.
Why it matters
Lagarde’s update provides insight into the ECB’s approach to managing inflation pressures and advancing a digital euro, which together underscore efforts to ensure economic stability and modernize payment infrastructures in Europe.
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