DeutschThe EU central bank complains about stablecoins. Due to the extreme market dominance of US dollar stablecoins, it fears a loss of power and the loss of its independence. The spread of its own stablecoins and a digital central bank currency should help.
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ECB Complains about Stablecoins, Sees Independence at Risk
The EU Central Bank (ECB) complains about stablecoins and sees the independence of the European Union at risk because US dollar stablecoins dominate the market. ECB author Jürgen Schaaf is therefore calling for European countermeasures, which he presents in a blog post.
“Stablecoins are changing the global financial world – with the US dollar at the top. Without a strategic response, Europe’s monetary sovereignty and financial stability could be undermined”, writes Schaaf.
Stablecoins are an important element of the crypto market. Here they primarily appear as trading currencies. Fiat currencies are still the global standard today. Users think and calculate in Swiss francs, euros or US dollars. The use of stablecoins makes trading easier for users thanks to their value stability.
In addition, the use of stablecoins is less costly. The tokens can be transferred more quickly between different marketplaces. Before the use of stablecoins, crypto marketplaces used Bitcoin as a trading currency, which is more expensive, less stable in value and slower to send.
Schaaf released his contribution yesterday in response to the US American Stablecoin Act GENIUS. He expects this regulation to lead to a rapidly growing distribution of US dollar-based stablecoins.
As a result, the market capitalization of stablecoins could rise from currently 230 billion to two trillion US dollars by the end of 2028. If the tokens become increasingly popular as a means of payment, the euro could fall behind. As so often, the ECB fears an unwanted loss of power as a result.
Stablecoin War between the EU and the USA? The ECB is Calling for these Measures
The ECB is calling for an increasing distribution of euro-based stablecoins in order to offer a counterweight to the market dominance of the US dollar. Currently, stablecoins that map the US dollar account for 99 percent of the market.
Schaaf argues that EU institutions should specifically support the use of “properly regulated” euro stablecoins instead of staying out of the market as neutral observers.
The spread of a CBDC – more precisely, the digital euro – is also conducive to the ECB’s goals. However, an opening up to the blockchain or, in a broader sense, the distributed ledger technology is particularly important. Schaaf is therefore calling for a departure from the hostile attitude for which the ECB is known so far.
“The increased use of distributed ledger technology (DLT) in institutional financial markets is crucial for maintaining the relevance of the future financial infrastructure.”
Last but not least, the author speaks out in favor of global coordination of stablecoin regulation in order to prevent instability. Schaaf is concerned about US dollar dominance, he writes. However, he explains that the modern conditions could also prove useful for the EU if the EU takes the right steps.
“However, this disruption also offers an opportunity for the euro to emerge stronger”, explains the author.
