A senior European Union official has called for the creation of euro-backed stablecoins to challenge the dominance of U.S. dollar-pegged tokens in global crypto markets. Pierre Gramegna, managing director of the European Stability Mechanism (ESM), said Europe must accelerate its efforts to issue domestic stablecoins and strengthen its digital financial sovereignty. “Europe should not be dependent on U.S. dollar-denominated stablecoins, which are currently dominating markets,” Gramegna said during a Thursday hearing on the eurozone’s economic outlook, where digital assets were among the topics discussed. He added that “Stablecoins are an inevitable part of this equation. In a rapidly evolving financial landscape, Europe should do its best to facilitate the generation of euro-denominated stablecoins by domestic issuers.” Digital Euro Gains Momentum as EU Debates Strategy to Counter U.S. Crypto Lead Gramegna’s comments come amid growing concerns that the U.S. is gaining a decisive lead in the digital currency space following the introduction of the GENIUS regulatory framework earlier this year, which spurred growth in dollar-backed stablecoins such as USDC and USDT. European officials worry that continued reliance on U.S.-issued tokens could undermine the EU’s control over its financial system and payment infrastructure. Paschal Donohoe, president of the Eurogroup, supported Gramegna’s stance on financial innovation but noted that the European Central Bank’s (ECB) digital euro project could also play a vital role in modernizing payments. “The digital euro could still be a net positive for commerce in the region,” he said. Momentum is already building behind the digital euro initiative. According to ECB Executive Board member Piero Cipollone, the central bank could roll out a digital euro by 2029 as discussions among member states progress. He described recent talks as a “major breakthrough” after euro area finance chiefs reached consensus on customer holding limits to protect bank deposits. Cipollone said that by early May next year, the European Parliament should have a position on the legislative framework underpinning the project, following an October progress report and several rounds of negotiations. Member states are also expected to reach a general agreement by the end of this year. The digital euro is designed to reduce Europe’s reliance on private payment companies such as Visa and PayPal, while also curbing the influence of dollar-denominated stablecoins in the region. However, several technical and policy questions remain unresolved, including privacy safeguards, bank coexistence, and whether the currency should operate on a public blockchain such as Ethereum or Solana. Supporters argue that euro stablecoins and a digital euro could reinforce Europe’s competitiveness in global finance, while skeptics warn that delays in regulation could leave the region further behind the U.S. in shaping the future of digital payments. Europe Steps Up Stablecoin Push to Counter U.S. Dollar Dominance European policymakers and financial institutions are intensifying efforts to develop euro-backed stablecoins, seeking to counter the overwhelming dominance of U.S. dollar-pegged tokens. In July, European Central Bank (ECB) adviser Jürgen Schaaf called for stronger global coordination on stablecoin regulation, warning that gaps between U.S. and EU frameworks could reinforce dollar supremacy. Writing on the ECB’s website, Schaaf urged support for “properly regulated euro-denominated stablecoins,” arguing they could strengthen Europe’s monetary sovereignty if designed with robust safeguards. Schaaf pointed to the U.S. GENIUS Act, signed into law in July, as “broadly aligned” with the EU’s Markets in Crypto-Assets (MiCA) framework but less stringent in certain areas. He said consistent global standards are needed to prevent market fragmentation and regulatory arbitrage. The ECB adviser’s remarks follow earlier concerns from Bank of Italy Governor Fabio Panetta, who noted the limited adoption of euro stablecoins despite MiCA’s rollout. Panetta said the digital euro could help bridge that gap, while Schaaf emphasized that private innovation and distributed ledger technology (DLT) must complement public initiatives. The ECB has already approved two DLT pilot projects, Pontes and Appia, aimed at improving wholesale and cross-border payments. At the same time, nine of Europe’s largest banks, including ING, UniCredit, CaixaBank, and Danske Bank, have announced plans to jointly launch a euro-backed stablecoin in 2026. The consortium will seek licensing under MiCA and promises faster, cheaper, and 24/7 cross-border transactions. The initiative highlights Europe’s growing determination to reduce reliance on U.S. stablecoins, which account for roughly 99% of global supply. ECB data shows euro-pegged tokens remain below €350 million in circulation, a gap European regulators and banks now appear intent on closingA senior European Union official has called for the creation of euro-backed stablecoins to challenge the dominance of U.S. dollar-pegged tokens in global crypto markets. Pierre Gramegna, managing director of the European Stability Mechanism (ESM), said Europe must accelerate its efforts to issue domestic stablecoins and strengthen its digital financial sovereignty. “Europe should not be dependent on U.S. dollar-denominated stablecoins, which are currently dominating markets,” Gramegna said during a Thursday hearing on the eurozone’s economic outlook, where digital assets were among the topics discussed. He added that “Stablecoins are an inevitable part of this equation. In a rapidly evolving financial landscape, Europe should do its best to facilitate the generation of euro-denominated stablecoins by domestic issuers.” Digital Euro Gains Momentum as EU Debates Strategy to Counter U.S. Crypto Lead Gramegna’s comments come amid growing concerns that the U.S. is gaining a decisive lead in the digital currency space following the introduction of the GENIUS regulatory framework earlier this year, which spurred growth in dollar-backed stablecoins such as USDC and USDT. European officials worry that continued reliance on U.S.-issued tokens could undermine the EU’s control over its financial system and payment infrastructure. Paschal Donohoe, president of the Eurogroup, supported Gramegna’s stance on financial innovation but noted that the European Central Bank’s (ECB) digital euro project could also play a vital role in modernizing payments. “The digital euro could still be a net positive for commerce in the region,” he said. Momentum is already building behind the digital euro initiative. According to ECB Executive Board member Piero Cipollone, the central bank could roll out a digital euro by 2029 as discussions among member states progress. He described recent talks as a “major breakthrough” after euro area finance chiefs reached consensus on customer holding limits to protect bank deposits. Cipollone said that by early May next year, the European Parliament should have a position on the legislative framework underpinning the project, following an October progress report and several rounds of negotiations. Member states are also expected to reach a general agreement by the end of this year. The digital euro is designed to reduce Europe’s reliance on private payment companies such as Visa and PayPal, while also curbing the influence of dollar-denominated stablecoins in the region. However, several technical and policy questions remain unresolved, including privacy safeguards, bank coexistence, and whether the currency should operate on a public blockchain such as Ethereum or Solana. Supporters argue that euro stablecoins and a digital euro could reinforce Europe’s competitiveness in global finance, while skeptics warn that delays in regulation could leave the region further behind the U.S. in shaping the future of digital payments. Europe Steps Up Stablecoin Push to Counter U.S. Dollar Dominance European policymakers and financial institutions are intensifying efforts to develop euro-backed stablecoins, seeking to counter the overwhelming dominance of U.S. dollar-pegged tokens. In July, European Central Bank (ECB) adviser Jürgen Schaaf called for stronger global coordination on stablecoin regulation, warning that gaps between U.S. and EU frameworks could reinforce dollar supremacy. Writing on the ECB’s website, Schaaf urged support for “properly regulated euro-denominated stablecoins,” arguing they could strengthen Europe’s monetary sovereignty if designed with robust safeguards. Schaaf pointed to the U.S. GENIUS Act, signed into law in July, as “broadly aligned” with the EU’s Markets in Crypto-Assets (MiCA) framework but less stringent in certain areas. He said consistent global standards are needed to prevent market fragmentation and regulatory arbitrage. The ECB adviser’s remarks follow earlier concerns from Bank of Italy Governor Fabio Panetta, who noted the limited adoption of euro stablecoins despite MiCA’s rollout. Panetta said the digital euro could help bridge that gap, while Schaaf emphasized that private innovation and distributed ledger technology (DLT) must complement public initiatives. The ECB has already approved two DLT pilot projects, Pontes and Appia, aimed at improving wholesale and cross-border payments. At the same time, nine of Europe’s largest banks, including ING, UniCredit, CaixaBank, and Danske Bank, have announced plans to jointly launch a euro-backed stablecoin in 2026. The consortium will seek licensing under MiCA and promises faster, cheaper, and 24/7 cross-border transactions. The initiative highlights Europe’s growing determination to reduce reliance on U.S. stablecoins, which account for roughly 99% of global supply. ECB data shows euro-pegged tokens remain below €350 million in circulation, a gap European regulators and banks now appear intent on closing

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