How Euro Stablecoins Could Address Eu’s Dollar Concerns 2025

The ECB is concerned that US dollar stablecoins could weaken its ability to affect policy, and European issuers have ideas about how this could be solved.

Central bankers in the European Union are making the case that US dollar-backed stablecoins could be a threat to their ability to make monetary policy.

The stablecoin market has boomed over the past year, largely driven by legal certainty in the US. Each month marks a new all-time high for stablecoin market capitalization. But policymakers at the European Central Bank (ECB) are concerned about what this increased adoption of dollar-based assets could mean during a time of crisis.

Issuers of stablecoins backed by the euro and the pound recognize those risks as well, but they don’t believe that proposed solutions, like a digital euro, can provide an alternative fast enough. They also question whether a central bank digital currency is the right fit.

Instead, issuers believe the solution to dollarization in Europe is a thriving European stablecoin ecosystem.

In July 2025, Jürgen Schaaf, an adviser in the ECB’s market infrastructure and payments unit, warned that increasing adoption of US-dollar-based stablecoins in Europe could “echo patterns observed in dollarised economies.” Namely, the central bank’s “control over monetary conditions could be weakened.”

This is particularly true, says Schaaf, if “users seek perceived safety or yield advantages that are not available in euro-denominated instruments.”

Concerns for systemic risk also abound. On Monday, De Nederlandsche Bank governor Olaf Sleijpen told the Financial Times that, if US stablecoins continue to grow as they are, “they will become systemically relevant at a certain point.” Once that level is reached, a run on stablecoins, were it to happen, would force the ECB to “rethink monetary policy” to ensure financial stability.

Related: Stablecoin panic could upend ECB policy, Dutch central bank governor warns

Dollar-based stablecoins are significantly ahead of their euro-based counterparts. According to Schaafer, 99% of the $300-billion stablecoin market is dollar-backed coins. Euro-denominated stablecoins amount to only 350 million euros ($405 million).

Source: CoinTelegraph