European Central Bank (ECB) President Christine Lagarde highlighted the resilience of the euro-area economy during the IMF Annual Meetings on Saturday. She noted that September’s 3.8% inflation rate was primarily driven by high energy costs, which the ECB anticipates will ease in the coming year. Despite an expected energy shock keeping inflation above the bank’s target through the first half of 2027, Lagarde emphasized that a measured policy response remains appropriate.
Lagarde also discussed the ECB’s progress on the digital euro, stating that the bank is preparing to introduce a digital equivalent of cash for day-to-day payments. She asserted that the digital euro will foster innovation and competition in retail payments, reinforcing Europe’s strategic autonomy in the payments sector. The digital euro is designed to coexist with both public and private payment solutions.
In related developments, the ECB recently launched Pontes, a system enabling financial institutions to settle wholesale tokenized asset transactions using central bank money. This system offers an alternative to private settlement assets like stablecoins and is set for full implementation by 2028.