Lagarde: Capital markets union imperative to build euro as global reserve
ECB President Christine Lagarde warns the euro won't become a global reserve currency 'overnight' and urges completion of the capital markets union to strengthen the euro's global role.
European Central Bank (ECB) President Christine Lagarde called on lawmakers on Monday in Brussels to complete the capital markets union, describing it as the most important step for the euro to become a global reserve currency. Lagarde stressed that this 'doesn't happen overnight' and noted that history shows no currency has become an international reserve currency without the capacity to defend itself and the military might to resist counterparts.
The debate centres on three main challenges: reducing dependence on US payment infrastructure, completing the EU reform agenda, and making the euro a competitive global currency in a landscape where the dollar's supremacy is no longer guaranteed. According to ECB data from 2025, US giants Visa and Mastercard account for 61% of card payments in the eurozone and nearly all cross-border transactions.
To address this, the EU has pushed for the approval of the digital euro, a public digital currency backed by the ECB. Legislation is expected to be approved by the end of 2026, with a crucial vote due on Tuesday in the European Parliament. Alongside the digital euro, the ECB unveiled a new payments strategy at the end of March, including the creation of two network infrastructures, 'Pontes' and 'Appia', designed to adapt to emerging technologies such as tokenisation and distributed ledger technology (DLT).
Lagarde mentioned the development of these infrastructures, along with the approval of the digital euro and reform of European capital markets, as pressing priorities. The ECB's push is partly a response to the rise of privately issued stablecoins—crypto assets designed to be less volatile—which have gained ground in the payments sector using these new technologies.
While countries like Russia and China have adopted their own public digital currencies, US President Donald Trump has abandoned plans for a Federal Reserve digital dollar in favour of stablecoins. The GENIUS Act provides a regulatory framework for these crypto assets. As 95% of global stablecoins are backed by the US dollar, Trump aims to strengthen the US currency through this new technology, positioning stablecoins as a key means of payment for international and strategically important transactions.
Among proposals to strengthen the EU's international role is the creation of more euro-denominated stablecoins, according to a European Commission document on the international role of the euro seen by Euronews.
