EU eyes euro stablecoins to challenge dollar monopoly

EU officials emphasize the need for euro-denominated stablecoins to compete against US dollar-backed tokens following a significant rise in the latter due to recent US legislation. Pierre Gramegna of the European Stability Mechanism stated that Europe should not rely on dollar-denominated stablecoins and must foster the creation of euro stablecoins by local issuers. This perspective reflects a shift from previous concerns over the systemic risks posed by stablecoins. President of the Eurogroup, Paschal Donohoe, supported this view, asserting that continuing financial innovation through stablecoins is crucial, alongside discussions about the potential positive impact of a digital euro. As euro stablecoins become more essential in the evolving financial landscape, the EU aims to ensure regulatory measures are in place to prevent foreign stablecoin issues from undermining liquidity in the eurozone, a topic that has become increasingly relevant in light of the growing geostrategic importance of stablecoins.

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