Ethereum co-founder Vitalik Buterin has renewed debate over the future of digital money by arguing that today’s decentralised stablecoins remain fundamentally flawed. In a recent post on X, Buterin outlined why current designs fall short of supporting a resilient, long-term digital monetary system, a critique with clear relevance for Europe’s digital euro debate.
Buterin’s central claim is that decentralised stablecoins have not yet solved three core problems. First, most remain tightly anchored to the US dollar, importing the economic and political assumptions of a foreign currency into global crypto markets. Second, they rely on price oracles that can be influenced or captured by large pools of capital, undermining claims of true decentralisation. Third, their economic design struggles to coexist with yield-bearing assets such as staking, creating structural tensions that can destabilise supposedly stable instruments.
Although framed as a technical discussion for the crypto community, the argument closely mirrors long-standing concerns among European policymakers. In Brussels and Frankfurt, the rapid growth of dollar-pegged stablecoins has raised questions about monetary sovereignty, financial stability and Europe’s dependence on non-European payment infrastructures.
From a euro area perspective, Buterin’s remarks underline a key distinction between private digital money and central bank digital currencies. The digital euro is explicitly designed to avoid reliance on foreign currency pegs, speculative collateral models or incentive-driven stability mechanisms. Instead, it would represent a direct claim on the Eurosystem, anchored in the euro itself and governed by public institutions rather than market dynamics.
His focus on oracle capture is particularly relevant in this context. The difficulty of building price feeds that are both decentralised and resistant to manipulation reinforces why central banks remain sceptical of delegating core monetary functions to decentralised finance architectures. For everyday payments, predictability, neutrality and legal certainty matter more than composability or yield.
Another notable aspect of Buterin’s argument is the call for alternative reference indices that are not tied exclusively to the US dollar. Over a multi-decade horizon, he suggests, reliance on a single national currency as the backbone of global digital finance may prove fragile. This concern closely mirrors European efforts to ensure that the euro remains a viable unit of account and settlement asset in an increasingly digital economy.
Stablecoins are unlikely to disappear. They continue to play a significant role in crypto trading, decentralised finance and cross-border transactions. However, Buterin’s warning highlights that even within the crypto community, confidence in stablecoins as long-term monetary instruments remains limited.
For the digital euro debate, the lesson is straightforward. Private digital money can innovate quickly, but durability, trust and monetary sovereignty are difficult to engineer without public backing. As Europe weighs whether and how to issue a digital euro, those trade-offs are becoming clearer, not just to regulators, but to crypto’s most influential voices.