Euro Stablecoins Gain Traction to Counter EU Dollarization

ECB officials warn that US dollar-backed stablecoins, accounting for 99% of the $300 billion stablecoin market, could weaken eurozone monetary policy if adoption continues. In contrast, euro stablecoins account for just €350 million, underscoring the need for growth. European issuers like Monerium and Agant call for a vibrant euro stablecoin ecosystem rather than awaiting a central bank digital currency (CBDC). Figures such as ECB adviser Jürgen Schaaf and Dutch central bank governor Olaf Sleijpen highlight risks of “dollarization” and systemic instability, urging growth of private euro stablecoins to safeguard policy control. Stablecoin issuers criticize the digital euro project for its slow rollout (potentially by 2029), limited functionality, and proposed holding caps. They argue private euro stablecoins can deliver faster innovation, global transferability, and real-world use cases. Collaboration between central banks and stablecoin providers, including liquidity facilities, could bolster the euro stablecoin landscape and reduce reliance on US-based assets.