The “crypto winter” caused by the crashes of Terra-Luna followed by Celsius Network, by no means signifies that cryptos are over; it’s more of a weeding-out process. The share of stablecoins that are, in principle, backed by mechanisms to stabilise their value has risen fivefold in 20 months. Ensuring a lasting future for stablecoins – which is a legitimate goal – means remaining vigilant with regard to the associated risks. Because, in reality, the name covers a wide range of different forms: -  “crypto-backed” stablecoins, where the word “stablecoin” is a misnomer  as the coins are backed by other crypto-assets; or algorithmic stablecoins, a category to which Luna belonged; -  stablecoins backed by a basket of assets held in reserve, for example  commodities or monetary assets, such as money market funds and commercial paper; in reality these are similar to investment tools and should be treated as such; -  last, stablecoins backed by bank deposits denominated in a single  currency, which are designed to be used as global payment instruments. Page 4 of 5 Regardless of what form they take, stablecoins are, at this stage and in the majority of cases, denominated in dollars and have been developed outside Europe. Their widescale use within Europe would therefore pose a dual challenge, for our strategic autonomy and for our monetary stability; indeed this is one of the reasons why the Eurosystem has launched an investigation phase on a retail digital euro.
Today, a central bank in a small open market economy, which would wish to turn a blind eye on the developments in the external environment and focus solely on the developments in the national economy, is doomed to failure. Secondly, globalisation changes the wage and price setting mechanisms in the national economy, which have an impact on the domestic inflation. Globalisation (the growing openness of economies) through the growing share of countries with low manufacturing costs in the global output - increases the margin and wage pressures, in consequence lowering the inflation. At the same time, globalisation drives up commodity prices, and thus contributes to - at least temporarily - increased inflation. Thirdly, increased international migration of workforce changes the situation on local labour markets. Where the workforce outflows, the wage pressures increase; in the case of an inflow of workforce, the wage pressures go down. Fourthly, globalisation changes the functioning of financial markets and increases the uncertainty as to the impact of decisions made by the central bank on these markets and on macroeconomic variables. Fifthly, globalisation has an impact on the central bank’s perception of the economic environment and the monetary policy strategy it applies. A fast transfer of the economic know-how (flow of the economic knowledge and analytical methods) changes the methods of economic analysis by central bank economists, as well as the way decisions regarding the monetary policy are made. Sixthly, globalisation increases the risk of speculative bubbles on the assets market.