Senior European central bank official Denis Beau has issued warnings about the growing threat of foreign stablecoins to the continent’s financial stability and monetary sovereignty. He stated that Europe must act quickly to prevent “dollarisation” in its payment systems. The response involves strengthening regulations like MiCA, promoting bank-issued euro stablecoins, and developing a digital euro as strategic tools to counter U.S. dollar dominance.
A senior official from the Banque de France has warned that Europe must act fast to prevent stablecoins from weakening its financial system. Denis Beau stated the rapid rise of mostly U.S. dollar-backed stablecoins creates both opportunity and risk for the continent.
He stressed that without action, Europe could face growing “dollarisation” in its payment system. Beau emphasized that Europe’s financial system should continue to rely on a balance between public money from central banks and private money from regulated institutions.
Policymakers are focusing on three main strategies to respond effectively. These include upgrading central bank payment systems, supporting euro-based digital money from private institutions, and strengthening regulations across the sector.
The proposed MiCA Regulation has already positioned the European Union as a global leader in crypto regulation. However, Beau believes it still needs tightening, especially to limit the everyday use of foreign stablecoins and reduce risks from global issuers.
He argued that stablecoins issued by banks are generally safer than those from non-bank entities. Banks benefit from access to central bank liquidity and stricter supervision, making them more reliable during economic stress.
The digital euro and bank-issued stablecoins are seen as key tools to counter U.S. dollar dominance in digital payments. This strategic push aims to protect financial stability while Europe embraces innovations like tokenisation.
