The European Central Bank (ECB) is betting on regulated stablecoins denominated in euros and private innovations to counter the growing influence of US dollar-pegged stablecoins, according to ECB advisor Jürgen Schaaf in a statement on the bank's website. He stated that a central bank digital currency (CBDC), such as the digital euro, is not a universal solution to counteract the dominance of dollar stablecoins. Schaaf proposed a comprehensive strategy that includes supporting euro stablecoins, using distributed ledger technology (DLT), and further development of the digital euro. This approach aims to protect Europe's monetary sovereignty in light of the rapid rise in popularity of dollar stablecoins.
Schaaf highlighted the risks associated with the increasing popularity of dollar stablecoins in the European Union, noting their potential to undermine the region's financial autonomy. "The risks are clear, and we must not underestimate them," he wrote, emphasizing the need for active measures to prevent Europe's dependence on US monetary policy. The US is witnessing significant growth in stablecoin usage, partly driven by regulatory frameworks like the GENIUS Act, which contrasts with European regulation such as MiCA. Schaaf called for enhanced global coordination in stablecoin regulation to address these differences.
"First and foremost, we could provide more support to regulated stablecoins denominated in euros," Schaaf noted, suggesting that such stablecoins, rather than the digital euro, will become the EU's primary tool in countering American expansion. He emphasized that "strategic blindness" in this area could be costly, adding that euro stablecoins developed in accordance with high standards and effective risk management can meet market needs and strengthen the international role of the euro. However, as Bank of Italy Governor Fabio Panetta noted in May 2025, the rollout of euro stablecoins is slow, despite regulatory frameworks like MiCA.
Schaaf views the digital euro as an element of a broader digital payments strategy. According to him, public digital currency combined with private innovations and DLT technology could form the basis for protecting European monetary sovereignty. "In point-of-interaction payments, the digital euro promises to be a reliable line of defense," he stated. Additionally, the ECB is actively exploring DLT capabilities: in July 2025, two pilot projects — Pontes and Appia — were approved to strengthen wholesale and cross-border payments infrastructure in Europe.
European regulators recognize that time is against them in the race for digital supremacy. Dollar stablecoins have already captured a significant market share, and merely waiting for a final decision on the digital euro could become an unaffordable luxury. Support for regulated euro stablecoins and the implementation of DLT are seen as important steps for maintaining Europe's competitiveness in the global financial system.