Lagarde Addresses Euro Area Inflation and Energy Costs
European Central Bank (ECB) President Christine Lagarde stated that September’s 3.8% euro area inflation rate was largely driven by high energy costs. Speaking at the IMF Annual Meetings on Saturday, Lagarde noted that the ECB expects these energy costs to ease next year.
While an energy shock is projected to keep euro area inflation above the bank’s target through the first half of 2027, Lagarde emphasized that a measured policy response remains appropriate.
Development of the Digital Euro and Payment Innovation
Lagarde also provided an update on the creation of a digital euro, stating that the ECB is preparing the digital equivalent of cash for day-to-day retail payments to complement physical currency.
According to Lagarde, the digital euro is designed to stimulate innovation and competition in retail payments. She noted that the continued coexistence of public and private solutions will support Europe's strategic autonomy in payments.
Wholesale Tokenized Asset Settlement
In addition to retail initiatives, the ECB previously launched a system named Pontes. The system allows financial institutions to settle wholesale tokenized asset transactions using central bank money, offering an alternative to private settlement assets such as stablecoins.
Pontes currently offers an initial core set of services, with full implementation anticipated by 2028.
