European Central Bank vice-president de Guindos says TPI has not been revisited and digital euro rollout depends on EU legislation

In an interview, European Central Bank Vice-President Luis de Guindos defended central bank independence amid political pressure on the US Federal Reserve and reiterated that the ECB’s interest rate level is currently appropriate. He said euro area sovereign bond markets are “calm and orderly” and that the Governing Council has not discussed using the transmission protection instrument (TPI) since it was established. De Guindos argued that government interference in monetary policy and “fiscal dominance” risk higher inflation and, later, higher interest rates, and stressed that credible fiscal rules are part of the stable political framework an independent central bank needs. He noted that the latest decision to keep rates unchanged was unanimous and that the ECB will keep all options open in a “complex and uncertain” environment, citing geopolitical and trade risks and subdued household consumption despite rising real incomes. On digital money, he said stablecoins and a digital euro are complementary, but a digital euro requires a legal framework and the European Parliament is not expected to decide until May 2026; stablecoins remain limited in Europe but pose financial stability questions internationally and require coordinated global regulation. He added that the ECB would be ready to introduce the digital euro swiftly once regulation is in place, while the decision on whether to proceed is not expected until 2026 or 2027, and called for close international cooperation to close regulatory gaps in stablecoins.