Europe Moves to Launch Euro Stablecoins, Challenging Dollar’s Crypto Dominance

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In a significant policy pivot, senior European Union officials are advocating for the creation of euro-denominated stablecoins to compete with the dominant US dollar-based tokens.

The push was led by Pierre Gramegna, managing director of the European Stability Mechanism (ESM), who argued that European financial sovereignty is at stake. “Europe should not be dependent on US dollar-denominated stablecoins, which are currently dominating markets,” Gramegna stated during a hearing on the eurozone’s economic health.

He emphasized that embracing financial innovation is crucial, adding, “Stablecoins are an inevitable part of this equation. In a rapidly evolving financial landscape, Europe should do its best to facilitate the generation of euro-denominated stablecoins by domestic issuers.”

The sentiment was echoed by Paschal Donohoe, president of the Eurogroup, who concurred on the need for innovation while also reaffirming the potential benefits of a digital euro, the bloc’s central bank digital currency (CBDC).

This new consensus marks a major departure from previous EU rhetoric that focused primarily on the systemic risks of stablecoins. Officials acknowledged that the recent boom in dollar-based tokens, fueled by the passage of a supportive regulatory framework in the US, has made the development of a European alternative a strategic necessity.