TLDR
- Europe lags as 99% of stablecoins stay tied to U.S. dollar
- Bini Smaghi urges EU to act rapid on euro-based stablecoins
- MiCA rules fail to boost euro’s stablecoin presence
- EU risks digital finance irrelevance without stablecoin push
- Over-regulation blocks Europe’s role in tokenized future
Europe faces growing pressure to adopt stablecoin strategies, as 99% of global stablecoins are tied to the U.S. dollar. Former European Central Bank board member Lorenzo Bini Smaghi warns of Europe’s declining influence in the digital finance sector. He urges immediate action to integrate stablecoins into Europe’s financial strategy before the region loses competitive ground.
Minimal Euro Role in Global Stablecoin Market
The global stablecoin market remains overwhelmingly dominated by U.S. dollar-denominated assets. The euro’s role in the sector remains minimal and non-influential. This imbalance highlights Europe’s delayed enattempt into a rapidly growing financial technology space.
Lorenzo Bini Smaghi: Europe must embrace stablecoins
In an opinion piece published by the @FT, @LBiniSmaghi, chairman of French bank Societe Generale and former member of the European Central Bank (ECB) Executive Board, argued that Europe should shake off its fears and embrace…
— CoinNess Global (@CoinnessGL) July 4, 2025
Bini Smaghi identifies this as a missed opportunity that reflects regulatory over-control and a limited appetite for innovation. Although the European Union implemented the MiCA framework, it has not translated into stablecoin growth tied to the euro. He notes that euro-backed stablecoins remain rare due to unclear incentives and regulatory bottlenecks.
Banks in Europe still consider stablecoins as threats rather than tools for future financial growth. This stance prevents integration with broader monetary policy goals and hinders digital payment development. As a result, European financial institutions are falling behind global players embracing tokenized assets.
MiCA Alone Is Not Enough to Lead
The EU introduced MiCA to manage digital assets by requiring stablecoin issuers to hold high-quality reserves. These include 30% in cash and 70% in high-grade sovereign bonds, offering structural control. However, this framework has not yet encouraged significant euro-based stablecoin issuance.
Bini Smaghi argues that over-regulation is damaging the region’s ability to lead digital finance transformation. He believes the European Central Bank should utilize its authority to balance innovation with financial integrity. A stronger policy stance would also support financial autonomy against U.S. digital asset dominance.
He also notes that treating stablecoins merely as low-tier financial tools is undermining Europe’s chance to shape global standards. Regulatory fear has delayed progress, while other economies rapidly build influence. Without urgent modifys, Europe risks being a passive participant in future global financial networks.
Strategic Shift Needed to Avoid Financial Isolation
Smaghi outlines three misjudgments: ignoring the value of tokenization, assuming Europe can avoid global stablecoin impact and overviewing monetary risks. These beliefs prevent bold decision-building in a market relocating rapider than European institutions can adapt. He warns that financial sovereignty could weaken without a clear euro-linked stablecoin strategy.
Europe must consider stablecoins as part of its economic infrastructure, not just a niche financial product. A revised outview will allow smoother integration into digital payment systems and reduce depconcludeence on U.S.-based assets. This shift would also ensure that the euro gains relevance in the next stage of financial evolution.
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