What’s Next for Crypto in the EU After Lagarde’s Exit?
An assessment of the policy vacuum, the pending digital euro rollout and the likely direction under new ECB leadership.
Executive summary
- Christine Lagarde will leave the ECB before the 2027 French presidential election, ending an eight‑year tenure that saw the adoption of the Markets in Crypto‑Assets (MiCA) framework and the launch of work on a digital euro.
- MiCA remains incomplete – it does not cover decentralized finance (DeFi) and still leaves gaps in stable‑coin supervision.
- The digital euro is still in development; its final design, privacy safeguards and offline capabilities are under intense debate.
- Potential successors – Pablo Hernández de Cos and Klaas Knot – are both cautious regulators, likely to continue Lagarde’s “crypto‑skeptic but pragmatic” approach.
- Implications for the market: a predictable, regulation‑first environment, slower DeFi integration, and a digital‑cash product that may reshape payments but will be rolled out cautiously.
1. Lagarde’s legacy and the current crypto regulatory landscape
During her time at the helm, Lagarde positioned the ECB as a watchdog rather than a promoter of crypto assets. Her 2022 remark that cryptocurrencies were “worth nothing” set a tone of caution that informed the ECB’s contributions to MiCA. While the European Parliament passed MiCA in 2024, the framework focuses largely on crypto‑asset service providers, token‑sale rules and stable‑coin capital requirements. It does not regulate DeFi protocols – a sector that has grown dramatically in transaction volume since 2022.
Lagarde also pushed for stricter stable‑coin oversight, warning that unchecked private‑issued digital money could erode national sovereignty. In 2025 she urged EU legislators to close loopholes and demand equivalence from non‑EU jurisdictions to avoid “stable‑coin runs.” Those statements continue to shape the ECB’s advocacy in Brussels.
2. The digital euro – progress and pending questions
The ECB launched the investigative phase for a digital euro in October 2021 and, in October 2025, the Governing Council approved the preparation stage for issuance. The envisioned rollout, outlined by PwC, targets a phased launch between 2027 and 2029, but several technical and policy issues remain:
| Issue | Current status | Potential impact |
|---|---|---|
| Privacy | ECB claims “cash‑like” anonymity, but critics fear increased state surveillance. | May affect consumer acceptance and spark political resistance. |
| Offline functionality | No definitive solution; pilot tests are ongoing. | Determines resiliency in low‑connectivity scenarios, a key demand from merchants. |
| Interoperability with existing payment networks | Ongoing dialogue with private‑sector partners. | Influences how quickly the digital euro can achieve market‑share. |
| Legal tender status | Still under discussion; initial issuance may be limited to retail use. | Shapes the degree to which the digital euro can substitute cash. |
Lagarde’s public statements framed the digital euro as a means to “make the euro fit for the future,” emphasizing security, European sovereignty and the preservation of cash‑like benefits in a digital form. Her successor will inherit the same political pressure from privacy advocates, fintech firms and traditional banks.
3. Who could replace Lagarde and what might they bring?
3.1 Pablo Hernández de Cos (Spain)
- Former governor of the Banco de España, currently a member of the ECB Governing Council.
- In a 2022 BIS presentation, he described crypto assets as “highly significant risks that are hard to measure,” advocating for a robust regulatory “railroad” rather than a “Wild West.”
- Expected stance: maintain a stringent, risk‑focused framework, likely pushing for additional MiCA amendments that address DeFi and tighten stable‑coin requirements.
3.2 Klaas Knot (Netherlands)
- Former president of De Nederlandsche Bank, now ECB executive board member.
- Has acknowledged the potential efficiency gains of blockchain but warned that stability must not be sacrificed for innovation.
- In mid‑2025 remarks, he emphasized an “agnostic” view on the technology that underpins future money, focusing on outcomes rather than the vehicle itself.
- Expected stance: continue cautious openness, perhaps supporting pilot projects for DeFi‑compatible services while insisting on rigorous supervision.
Both candidates have signaled continuity rather than a dramatic policy shift. Their public records suggest they will preserve the ECB’s core message: crypto innovation is permissible only under a framework that safeguards financial stability and consumer protection.
4. Political context – why the timing matters
Lagarde’s departure before the 2027 French presidential election gives President Emmanuel Macron a decisive role in shaping the next ECB president. French influence is historically strong; past presidents have rarely been chosen without Paris’s backing. The rise of the right‑wing National Rally, which has been gaining poll traction, adds another layer of uncertainty. Should the French government favor a candidate aligned with its broader economic agenda, subtle adjustments to the ECB’s crypto stance could follow – but the overall cautious trajectory is likely to remain.
5. Market implications and outlook
- Regulatory certainty, not liberalization – Investors can expect MiCA to solidify, with incremental amendments aimed at closing DeFi and stable‑coin gaps rather than opening new avenues.
- Digital euro rollout – A phased launch may begin with limited retail pilots in 2027, expanding as privacy and offline capabilities are proven. Companies that build on the digital euro infrastructure could gain early‑mover advantages, but the product is unlikely to dethrone cash in the short term.
- Stable‑coin market – EU issuers will face stricter capital and governance standards. Non‑EU stable‑coin providers may encounter “equivalence” hurdles, potentially curbing cross‑border usage of U.S. dollar‑linked tokens.
- DeFi activity – Without explicit MiCA coverage, DeFi platforms will continue to operate in a regulatory grey zone. Expect heightened supervisory scrutiny and possible targeted guidance from the ECB or national regulators.
- Innovation climate – The ECB’s pragmatic approach—recognizing the need for digital cash while emphasizing security—should reassure fintech firms that Europe remains a fertile ground for blockchain‑based payments, provided they adhere to the emerging rules.
6. Key takeaways
- Lagarde’s exit will not radically change the ECB’s crypto posture; new leadership is expected to preserve a risk‑averse, stability‑first framework.
- MiCA still needs refinement—particularly around DeFi and stable‑coin cross‑border equivalence.
- The digital euro remains a work in progress; privacy, offline use and legal‑tender status are the main hurdles before a broad launch.
- Potential successors (Hernández de Cos, Knot) are both cautious regulators, likely to continue demanding rigorous oversight while allowing limited, well‑controlled innovation.
- For market participants, the coming months should be focused on compliance with existing MiCA rules, preparation for the digital euro pilot phase, and monitoring for any ECB guidance that could broaden or tighten the regulatory perimeter.
The EU’s crypto ecosystem stands at a crossroads: a solid regulatory foundation paired with a cautious yet forward‑looking central bank. How the next ECB president balances these forces will shape Europe’s position in the global digital‑asset landscape for years to come.
Source: https://cointelegraph.com/news/what-next-crypto-europe-ecb-christine-lagarde?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
