Crypto
Lagarde Blocks Euro Stablecoin Push, Calls $300B Market a Stability Risk for ECB Policy
Key Takeaways
- ECB President Lagarde called euro-denominated stablecoins a financial stability risk on May 8, 2026.
- Lagarde mentioned that USDC depegged to $0.877 during SVB’s 2023 collapse, exposing $3.3 billion in Circle reserves.
- The ECB’s Pontes project launches in September 2026 to anchor DLT settlement in central bank money.
Lagarde Warns European Banks That Euro Stablecoins Could Narrow ECB Rate Channel
Lagarde delivered her remarks at the Banco de España Latam Economic Forum in Roda de Bará, Spain. The speech, titled “ Stablecoins and the future of money: separating functions from instruments,” came as the global stablecoin market has grown from under $10 billion six years ago to more than $300 billion today.
“The case for promoting euro-denominated stablecoins is far weaker than it appears,” Lagarde remarked.
The market remains heavily dollar-dominated, with nearly 98% of stablecoins pegged to the U.S. dollar. Tether and Circle control a massive share of that market. The U.S. GENIUS Act, currently advancing through Congress, explicitly frames stablecoin expansion as a tool to cement the dollar’s global dominance and sustain demand for U.S. Treasuries.
Lagarde acknowledged that euro stablecoins operating under the EU’s Markets in Crypto-Assets Regulation (MiCAR), which took effect in 2024, could generate additional demand for euro-area safe assets, compress sovereign yields, and extend the euro’s international reach. She did not dismiss those potential gains outright.
But she argued that two risks make the trade-off unfavorable. The first is financial stability. Stablecoins are private liabilities whose backing can come under sudden pressure during periods of stress. She highlighted that when Silicon Valley Bank (SVB) collapsed in March 2023, Circle disclosed that $3.3 billion of USDC’s reserves were held there. During that window, Lagarde said, USDC briefly traded at $0.877, more than 12 cents below its $1 peg.
“These trade-offs outweigh the short-term gains in financing conditions and international reach that euro-denominated stablecoins might provide,” Lagarde stated during her speech.
The second concern is monetary policy transmission, she explained. In the euro area, banks remain the primary channel through which ECB interest rate decisions reach firms and households. If retail deposits migrate into non-bank stablecoins and return to banks as more expensive wholesale funding, that channel narrows. ECB research published in March 2026 (Working Paper No. 3199) found that large-scale deposit substitution would weaken bank lending and monetary policy pass-through, an effect the paper noted is more pronounced in bank-heavy economies like Europe than in the U.S.
Lagarde’s position puts her at odds with Bundesbank President Joachim Nagel, also an ECB Governing Council member. In a Feb. 16, 2026, keynote at the New Year’s Reception of AmCham Germany, Nagel expressed support for the instruments. “I also see merit in euro-denominated stablecoins, as they can be used for cross-border payments by individuals and firms at low cost,” Nagel explained.
The divergence reflects a broader internal debate within the Eurosystem over how to respond to dollar stablecoin dominance and the risk of what Lagarde called “digital dollarisation.”
Rather than match U.S. stablecoin policy, Lagarde pointed to the Eurosystem’s own infrastructure plans. The Pontes project, launching in September 2026, will link distributed ledger platforms to TARGET, the ECB’s existing settlement system, allowing DLT-based transactions to settle in central bank money. The Appia roadmap, published in March 2026, sets a path to a fully interoperable European tokenized financial ecosystem by 2028.
“Our task is not to replicate instruments developed elsewhere, but to build the foundations and the infrastructure that serve our own objectives, so that we can harness the benefits of innovation without importing the fragilities,” Lagarde said.
European banks and payment firms that have already begun preparing regulated euro stablecoin products under MiCAR may now face added scrutiny as the ECB signals it prefers central bank-anchored solutions over private alternatives.
Crypto
British Airline Jet2 Shares Jump 9% After $536M Fuel Hedge Gain Offsets Middle East Travel Fears
Key Takeaways
- Jet2 recorded a $536 million balance sheet windfall on July 8 after locking in low-cost fuel derivatives.
- The Middle East conflict triggered a 67% decline in annual cash inflows as travelers delayed holiday bookings.
- CEO Steve Heapy announced a $335 million buyback program and expanding operations at London Gatwick Airport.
Sector Resilience Amid Fuel Volatility
British airline and package holiday provider Jet2 defied intense geopolitical instability and travel sector panic triggered by the Middle East war by reporting a more than $500 million balance sheet boost, fueled by the rising price of jet fuel.
As the conflict in the Middle East escalated, spiking fuel rates caused the value of the company’s fuel derivatives to soar. According to Jet2’s full financial results released July 8, an extra $536 million in income was primarily driven by these favorable fair value movements.
The financial buffer comes after widespread fears earlier this year that rising energy costs could push airlines into bankruptcy and force massive summer holiday cancellations. In the United States, higher fuel prices contributed to the collapse of low-budget airline Spirit in May. The United Kingdom had been labeled as the nation “most exposed” to the jet fuel crisis, forcing government ministers to scramble to protect airline fuel access and temporarily suspend airport capacity rules.
While Jet2 was able to mitigate the price shock, the broader conflict still took a toll on booking behaviors. The airline conceded that ongoing travel uncertainty from the war caused holidaymakers to delay their trips and book much closer to their departure dates than usual. As a result, Jet2’s cash inflow plummeted by 67% to approximately $103 million for the fiscal year ending March 31.
Financially, Jet2 reported mixed full-year results. Group revenue climbed 4% to $10.05 billion, but pre-tax profit slipped 7% to $738.6 million, hit hard by lower income earned on its cash deposits.
Despite the profit dip, operational metrics showed strong consumer demand. Jet2 increased its total seat capacity by 8% to 24 million and flew 20.8 million passengers — a 5% increase year-over-year. The company also announced a new $335 million share buyback program, pointing to robust liquidity and confidence in its midterm outlook.
On the stock market, shares of the AIM-listed company jumped 9% to $19.92 at Wednesday’s opening bell, leaving the stock up 5% for the year.
Chief Executive Issues Tax Warning
The financial report coincided with an aggressive political warning from Jet2 Chief Executive Steve Heapy. Speaking to shareholders, Heapy cautioned political figures — specifically naming prominent politician Andy Burnham — against treating the aviation and holiday industry as a “cash cow.”
Burnham is widely anticipated to enter Downing Street later this month following recent political shifts.
“Don’t treat the aviation or holiday industry as a cash cow, because taxes increase the price of flying,” Heapy said, pointing out that Jet2 had to absorb $67 million in additional regulatory and tax costs over the last year. “I think, you know, enough is enough.”
Operationally, Jet2 is pushing a major expansion strategy designed to challenge the UK’s dominant legacy carriers. In March, the airline launched a six-aircraft hub at London Gatwick Airport, signaling an aggressive move out of its traditional northern England strongholds. The company notes it now operates within a 90-minute drive of more than 90% of the UK population.
Key Takeaways
- LAB token cratered 90% over 48 hours, wiping out billions in market cap.
- ZachXBT slammed top centralized exchanges for failing to halt the July manipulation.
- Investors surged to avoid trading LAB as team token unlocks are set for later in July 2026.
LAB Trade Blames ‘Large Market Participants’
LAB, the native token of the multi-chain trading platform LAB Trade, suffered a catastrophic collapse this week, plunging from just over $7 to $1.25 on Wednesday—a staggering 80% decline in under 24 hours. This crash followed an equally brutal sell-off on Tuesday, which saw the token slide from nearly $17. In total, LAB wiped out nearly 90% of its value in just 48 hours.
The financial fallout was swift: a market capitalization that exceeded $5 billion on Tuesday morning evaporated to just $390 million by 3:30 p.m. EST on Wednesday. The freefall prompted the LAB Trade team to address the panic on X, where they expressed disappointment and deflected blame toward external heavy-sellers:
“While today’s market activity is disappointing, our product roadmap and long-term focus remain unchanged. We’re seeing significant selling pressure from large market participants. Several independent trading firms also hold substantial LAB positions that are not affiliated with our team. We’re working closely with our liquidity partners and continue to monitor market conditions,” the team said on X.
With this crash, LAB joins a notorious lineup of volatile tokens, such as RAVE, RIVER and SIREN. Each of these projects experienced meteoric rises followed by near-instantaneous erasures, sparking widespread “pump-and-dump” allegations against their respective teams and murky distribution networks.
Crypto Sleuth Slams Centralized Exchanges
Prominent on-chain detective ZachXBT, who previously flagged suspicious insider loans and market-maker coordination back in May, blasted major centralized exchanges ( CEXs) for failing to protect retail investors. Taking to X, ZachXBT criticized the lack of proactive intervention:
“Disappointing to see how no action was taken by Binance, Bitget, and Gate earlier to prevent it. If CEXs cared, profits from the accounts manipulating the price would be distributed to users at a minimum. Unlocks for investors were scheduled to begin later this month, however, multiple late vesting changes occurred in the past.”
ZachXBT reiterated his previous warnings that insiders have effectively controlled the entire circulating supply, allowing market makers to orchestrate extreme price manipulation on major exchanges. His final advice to the community was blunt: avoid trading LAB under any circumstances.
ZachXBT Names RAVE, RIVER, SIREN, and LAB as Victims of Bitget-Enabled Market Maker Fraud
Blockchain investigator ZachXBT has renewed his assault on Bitget, accusing the exchange of knowingly enabling market makers to run supply…
ZachXBT Names RAVE, RIVER, SIREN, and LAB as Victims of Bitget-Enabled Market Maker Fraud
Blockchain investigator ZachXBT has renewed his assault on Bitget, accusing the exchange of knowingly enabling market makers to run supply…
ZachXBT Names RAVE, RIVER, SIREN, and LAB as Victims of Bitget-Enabled Market Maker Fraud
Blockchain investigator ZachXBT has renewed his assault on Bitget, accusing the exchange of knowingly enabling market makers to run supply…
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