Global stablecoin usage has surged in recent years, with total market capitalisation exceeding $303 billion by mid-2025 — a rise of roughly 75 percent in a year, according to CryptoSlate and the Digital Euro Association. More than $6 trillion in non-trading transactions were settled using stablecoins over the same period.
(left-hand scale: USD billions; right-hand scale: percentages) — Source: ECB
Dollar-pegged tokens dominate the market. Tether’s USDT and Circle’s USDC control about 81 percent of circulating supply, figures from CryptoSlate show. Euro-denominated tokens remain marginal, accounting for less than €1 billion — just 0.3 percent of the total — according to Reuters.
European officials warn that reliance on U.S.-based stablecoins could import American monetary conditions into the euro area. ECB adviser Jürgen Schaaf cautioned in an ECB publication that widespread use of dollar tokens for payments or savings risks weakening the ECB’s monetary control. ECB researchers have also highlighted the network effects that make competing with large dollar stablecoins increasingly difficult.
Regulatory response and systemic concerns
The EU’s regulatory answer has been MiCA, the Markets in Crypto-Assets Regulation, which came into force at the end of 2024. MiCA establishes strict licensing, reserve management, and redemption rules for stablecoin issuers. The European Systemic Risk Board (ESRB) warned in a 2024 report that global stablecoin issuance had doubled since 2023 and that 99 percent of volume remained denominated in U.S. dollars. The ESRB said this imbalance reflects the lack of credible euro alternatives and called for development of euro-stablecoins, tokenised deposits, and a digital euro.
An ECB blog post, “From hype to hazard,” underscored similar risks. It warned that if U.S. dollar stablecoins gained broader use in Europe’s payment system, the EU’s financing costs could rise and the bloc’s monetary autonomy could erode. The ECB noted that stablecoin issuers primarily invest reserves in U.S. Treasuries, increasing demand for U.S. debt and strengthening the dollar’s geopolitical influence.
New initiatives in euro-stablecoins
Euro-denominated stablecoins remain relatively small. Italy’s central bank reported that circulation reached just €620 million in September 2025, compared with nearly $300 billion globally, according to Reuters. Private issuers including Monerium, Agant, SG-FORGE and Circle’s EUROC operate euro-backed tokens, but adoption remains concentrated in niche crypto markets.
Monerium CEO Gísli Kristjánsson told the ECB that USD stablecoins benefit from early adoption by crypto exchanges and the long-standing dominance of the dollar as the “quote asset” in digital markets. He said that broader use of euro tokens will depend on real-world adoption, such as salary payments and e-commerce.
Momentum began shifting in late 2025. A consortium of nine European banks — including ING, UniCredit, KBC, SEB and CaixaBank — announced plans for an Amsterdam-based euro stablecoin. The group said the project would reduce reliance on U.S. stablecoins and support European strategic autonomy, Reuters reported. The token is expected to launch in the second half of 2026.
Other initiatives are emerging. SG-FORGE’s euro stablecoin reached €56 million in circulation by September 2025. Alipay’s parent company, Ant Group, plans to launch a Luxembourg-based euro stablecoin using EU passporting rules, while Citigroup and Bank of America are exploring euro-token issuance.
Digital euro progress and delays
Alongside private-sector initiatives, the ECB continues to develop the digital euro, its retail central bank digital currency. The project entered its preparation phase in late 2023, and a 2025 progress update confirmed ongoing technical experiments. ECB Executive Board member Piero Cipollone told lawmakers that Europe lacks a unified digital payments system and warned that dependence on foreign networks threatens strategic autonomy.
A Eurosystem survey showed that 66 percent of Europeans would be willing to try a digital euro once informed about how it works. Policymakers say the CBDC would safeguard access to public money in an increasingly digital world and ensure payment continuity even if private or foreign systems were disrupted.
However, the digital euro faces design challenges — including privacy protections, offline functionality and holding limits — and the ECB does not expect to decide on issuance before 2026. IMF chief economist Philip Lane argued in an IMF publication that while stablecoins may complement bank deposits, they cannot replace central bank money because they lack guaranteed redemption under stress.
Implications for Europe’s monetary future
Analysts say euro-stablecoins could help reduce reliance on dollar tokens in the near term by providing euro liquidity on public blockchains and enabling settlement in Europe’s emerging tokenised financial markets. They could also redirect liquidity toward euro-area assets instead of U.S. Treasuries, the ECB noted.
But risks remain. The ESRB has warned of potential run scenarios, market fragmentation and reserve mismanagement among issuers. Non-EU stablecoins may also circumvent MiCA through reverse solicitation, complicating enforcement.
Despite these challenges, policymakers increasingly view euro-stablecoins and the digital euro as complementary. The ECB has acknowledged that well-regulated euro-tokens could strengthen the currency’s international role and support Europe’s digital finance ecosystem.
With the digital euro still several years away, officials say encouraging safe, scalable euro-stablecoins may be Europe’s most pragmatic short-term strategy to counter deepening reliance on U.S.-based digital money.