European officials are increasingly alarmed by the region’s growing reliance on U.S. dollar-backed stablecoins, warning it could erode the euro’s influence and disrupt the continent’s financial foundations.
Although crypto adoption has grown rapidly across Europe, nearly all of the activity is still denominated in USD. Policymakers now fear this trend could accelerate digital dollarization and weaken the European Central Bank’s (ECB) control over monetary policy.
According to recent research, almost 99.8% of stablecoins used in Europe are linked to the U.S. dollar, even as the region’s overall share of global stablecoin activity climbs. This has triggered concerns that American payment infrastructure is gaining a dominant foothold in European finance.
In response, EU institutions are turning to regulatory action. The Markets in Crypto-Assets (MiCA) framework introduces strict rules for stablecoin issuers, including capital requirements and transparency measures, aiming to reduce systemic risks and curb the influence of foreign digital currencies.
The ECB has also renewed calls for a digital euro to counterbalance the rising popularity of dollar-pegged assets. While not opposed to private euro-backed stablecoins, officials stress that such tools must not compromise financial sovereignty.
Yet, some experts argue a central bank digital euro might overlap with private solutions, offering limited added value. Others believe a public alternative is essential to secure the euro’s role in a rapidly evolving financial landscape.
The debate continues as EU leaders navigate the delicate balance between encouraging innovation and defending monetary autonomy. With MiCA now in place, the effectiveness of Europe’s digital currency strategy will depend on how rigorously and uniformly it is enforced.
Alexander Zdravkov
Reporter at Coindoo
Alexander Zdravkov is passionate about questions of meaning. He is a fluent German speaker as well as He has been in the crypto space for more than three years and has an eye for spotting emerging trends in the world of digital currencies. Whether providing in-depth analysis or reporting on all topics on a daily basis, his deep understanding and enthusiasm for what he does makes him a valuable addition to the team.
Source: https://coindoo.com/can-the-euro-survive-the-stablecoin-wave/