The head of the European Central Bank, Christine Lagarde, says stronger rules are needed for “stablecoins”—a type of digital currency—that come from outside the European Union.
Her main concern is that if people suddenly wanted to cash out their digital coins, they would all do so in Europe because its rules are stricter and protect investors better.
However, the money set aside in Europe to cover these redemptions might not be enough if everyone tried to cash out at once, which could create a problem. She argues that unless a foreign country’s rules are as tough as Europe’s, these digital currencies shouldn’t be allowed to operate there.
