EU Ministers Plan Strategy to Boost Euro-Based Stablecoins
European officials are preparing to confront a growing concern - the global stablecoin market is rapidly expanding, and nearly all of it runs on the U.S. dollar.
Determined not to be left behind, eurozone finance ministers are set to discuss a new strategy aimed at giving the euro a stronger foothold in digital finance.
The debate, scheduled for Thursday’s meeting in Brussels, will center on how Europe can encourage the development of euro-denominated stablecoins, which currently make up less than 1% of the global $300 billion market. One senior official familiar with the agenda said the discussion marks the beginning of a broader effort to “secure Europe’s place in a market the U.S. is trying to dominate.”
A Market Built on Dollars
Dollar-based stablecoins have become the backbone of the crypto economy, providing the liquidity that powers most exchanges and DeFi systems. In the U.S., July’s Genius Act further strengthened this dominance by requiring that stablecoins be backed exclusively by U.S. dollars or Treasury assets – effectively cementing Washington’s control over the sector.
European policymakers worry that this could turn into a digital-age version of dollar hegemony, leaving the euro at risk of irrelevance in the next phase of financial innovation.
Banks Take the Lead, But Europe Lags Behind
Some European banks are already moving to change that. A coalition of nine lenders – including ING and UniCredit – recently launched a euro-based stablecoin to compete with U.S. tokens. But their combined issuance, worth just $620 million, is barely a drop in the ocean compared to their American counterparts.
“Europe is experimenting, but the scale is nowhere near what’s happening across the Atlantic,” the eurozone official said, adding that ministers will need to decide whether the region’s regulatory approach is helping or holding the industry back.
The MiCA Question
Under the Markets in Crypto-Assets Regulation (MiCA), the EU has one of the world’s most comprehensive crypto frameworks – but some policymakers believe it may have gone too far in restricting flexibility. Thursday’s meeting will explore whether the rules can be adapted to better support innovation while maintaining safeguards.
The conversation will also touch on the digital euro, a long-term European Central Bank project aimed at creating a government-backed alternative to private stablecoins. Officials say the two efforts – a regulatory framework for private issuers and a state-backed currency – must evolve together if the euro is to remain competitive.
“This is just the opening round,” said the senior official. “Finance ministers want to understand the landscape, gather ideas, and then chart a path forward. The priority is simple – make sure Europe has a real seat at the table before the market gets away from us.”
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Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
