Eurozone Ministers Consider Boosting Euro Stablecoin Development
Eurozone finance ministers are set to meet on Thursday to discuss how to encourage the growth of euro-denominated stablecoins, aiming to prevent the rapidly expanding market from being dominated solely by the United States, according to a senior eurozone official.
Stablecoins are digital tokens designed to maintain a stable value by being backed with assets such as fiat currencies or government securities. The global stablecoin market is currently valued at around $300 billion, but it is projected to grow tenfold over the next decade, the official noted.
At present, the vast majority of stablecoins are pegged to the U.S. dollar, and new American legislation — the Genius Act, passed in July — seeks to cement that dominance by requiring issuers to back stablecoins with U.S. dollars or Treasury assets.
“The discussion is about how we, in Europe, should position ourselves in response to these developments,” the official explained, referring to preparations for the upcoming ministerial meeting.
In an effort to counter U.S. control of the digital asset space, a consortium of nine European banks, including ING and UniCredit, recently launched a euro-backed stablecoin. However, euro-denominated stablecoins currently represent only $620 million of the global $300 billion in circulation.
Europe already has a regulatory framework for crypto assets — the Markets in Crypto-Assets Regulation (MiCA) — but ministers are expected to discuss whether adjustments are needed to better support the creation of high-quality euro stablecoins.
“They will examine whether the current rules strike the right balance between risk management and financial innovation, and explore how this ties in with the digital euro project,” the official said.
For now, the discussions mark an early-stage effort to bring the issue to the attention of Europe’s top finance officials. “This is mainly about awareness, gathering first reactions, and deciding the next steps,” the official concluded.
