European Union officials are promoting the creation of euro-denominated stablecoins to challenge the market dominance of U.S. dollar-pegged tokens. This push follows a 2025 surge in dollar stablecoins after the passage of key American legislation.
At a Thursday hearing on the eurozone’s economic health, Pierre Gramegna, managing director of the European Stability Mechanism, articulated the need for a European alternative. “Europe should not be dependent on US dollar‑denominated stablecoins, which are currently dominating markets,” Gramegna said. He elaborated on the strategic necessity of this financial evolution, stating, “In a rapidly evolving financial landscape, Europe should do its best to facilitate the generation of euro‑denominated stablecoins by domestic issuers.” Gramegna also noted that Europe should embrace the potential for financial innovation with tokenized assets and that “Stablecoins are an inevitable part of this equation.”
This sentiment was shared by other officials. Paschal Donohoe, president of the Eurogroup, concurred on the necessity of financial innovation, adding that a digital euro, a central bank digital currency (CBDC), could still provide a net positive for commerce within the region. The consensus among EU officials on the need for euro stablecoins is a direct response to the growth of dollar-denominated tokens after the United States enacted its GENIUS regulatory framework. This represents a change from earlier official rhetoric that often highlighted the systemic dangers associated with stablecoins.
While support for private euro stablecoins grows, the EU’s own digital currency project faces a prolonged timeline. European Central Bank board member Piero Cipollone indicated the digital euro is unlikely to launch before 2029. He attributed the protracted schedule to delays caused by EU lawmakers. Cipollone is a prominent supporter of the central bank’s digital currency initiative and a staunch opponent of privately-issued digital currencies.
The debate has escalated to a matter of geostrategic importance, with governments viewing the placement of their fiat currencies on digital platforms as a way to maximize global demand. This concern was previously voiced in September by ECB President Christine Lagarde. She warned that the European Union must address risks from foreign stablecoins and close existing regulatory gaps to prevent foreign issuers from draining liquidity from the euro and the EU.
The European discussion is set against a backdrop of U.S. policy. Christopher Waller, a U.S. Federal Reserve governor, has repeatedly promoted dollar-denominated stablecoins as a mechanism to protect the dollar’s global reserve-currency status. In a 2024 speech, Waller outlined how the existing digital asset ecosystem reinforces the dollar’s position. “Crypto‑assets are de‑facto traded in US dollars. So, it is likely that any expansion of trading in the DeFi world will simply strengthen the dominant role of the dollar,” he stated.
