ECB Warns Dollar Stablecoins Undermine Euro Monetary Autonomy

The European Central Bank cautioned that the rapid spread of dollar-pegged stablecoins could weaken the euro area’s monetary sovereignty, raise financing costs and heighten Europe’s dependence on U.S. policy decisions. In a blog post published Monday, ECB adviser Jürgen Schaaf wrote that dollar-linked tokens already dominate roughly 99% of the global stablecoin market, while the combined capitalisation of euro-backed versions is below €350 million. Schaaf argued that widespread use of dollar stablecoins in payments, savings and settlement would erode the ECB’s control over money supply and interest rates, mirroring patterns seen in fully dollarised economies. He urged the bloc to accelerate work on a digital euro, foster credible euro-based stablecoins and push for internationally coordinated rules to prevent regulatory arbitrage. Without a timely response, the blog warned, the global stablecoin market could swell to about €2 trillion by 2028, cementing U.S. strategic and economic advantages.