The European Union is intensifying efforts to create euro-denominated stablecoins, aiming to diminish the dominance of the US dollar in the digital asset market. These actions are a response to the rapid growth of dollar stablecoins in 2025 following the implementation of the GENIUS legislation in the US, which legalized the circulation of such tokens.
This is reported by Finway
Geoeconomic Competition and Strategic Necessity
During hearings on the economic situation in the Eurozone, the Managing Director of the European Stability Mechanism, Pierre Gramegna, emphasized that Europe’s dependence on dollar-denominated stablecoins poses a vulnerability to the EU’s financial system and called for the promotion of euro-denominated digital assets.
“Europe should not rely on stablecoins denominated in US dollars, which currently dominate the markets,” said Gramegna.
He added that Europe must seize the opportunities presented by financial innovations, particularly stablecoins and tokenized assets, and do everything possible to facilitate the emergence of euro-stablecoins from local issuers. These statements reflect a shift in the position of European regulators: while stablecoins were previously seen as a risk to stability, their role in strengthening the EU’s financial independence is now recognized.
Development of Digital Euro and Bank Plans
President of the Eurogroup Paschal Donohoe supported the idea of innovation in the financial sector, emphasizing that a digital euro (CBDC) could positively impact commerce in the region. Meanwhile, the European Central Bank first presented information on the implementation of a digital euro back in January 2023. However, according to ECB Executive Board member Pierre Cifollone, the launch of a CBDC in the Eurozone is unlikely to occur before 2029 due to delays from EU lawmakers.
At the same time, a group of nine leading European banks plans to launch a regulated stablecoin pegged to the euro and compliant with the MiCA regulation in the second half of 2026. This initiative aims to strengthen the euro’s position in the global financial market and reduce dependence on the dollar.
ECB President Christine Lagarde has previously warned about the need to eliminate risks associated with the use of foreign stablecoins and emphasized the importance of filling regulatory gaps to avoid liquidity outflows from the Eurozone.
Meanwhile, results from an ECB survey conducted among 19,000 respondents in 11 Eurozone countries showed that interest in investing in CBDCs remains low. This indicates the need for further efforts to engage the public and build trust in new financial products.
Overall, European officials view the launch of euro stablecoins as a strategic step to enhance financial security and the EU’s competitiveness in the world of digital currencies.