Overview
- At an informal EU finance ministers meeting on Friday, the ECB firmly pushed back on proposals to relax liquidity requirements for euro stablecoin issuers and to give those firms access to ECB funding.
- A Bruegel paper presented by Lucrezia Reichlin, Bo Sangers and Jeromin Zettelmeyer argued for lighter rules and possible central‑bank support to help Europe expand euro‑denominated tokens against dollar dominance.
- The ECB and other central bankers warned that when customers buy stablecoins their money moves from bank deposits to issuer accounts, which can reduce banks’ deposit bases, raise their funding costs and weaken monetary policy transmission.
- Finance ministers expressed mixed views and left policy under review while MiCAR remains in force and the ECB continues work on a digital euro targeted for 2029; a 37‑bank Qivalis consortium says it aims to launch a euro stablecoin later in 2026.
- The debate plays out against a $300 billion stablecoin market in which euro‑pegged tokens make up roughly 0.3 percent, and it centers on balancing on‑chain euro liquidity with safeguards to prevent deposit runs and preserve financial stability.