ECB stablecoins
The European Central Bank examines stablecoins because privately issued digital money can affect payments and the wider financial system. A token designed to track a currency can change how people hold funds and transfer value between services. Its use raises questions about backing assets, redemption, bank funding and the currency in which transactions are carried out.
The ECB considers stablecoins alongside the European MiCA framework and public payment infrastructure. The proposed digital euro and settlement in central bank money address different parts of that infrastructure. The distinction matters because central bank money, commercial bank deposits and privately issued tokens have different issuers and risk structures.
What the ECB worries about
In the ECB blog post From hype to hazard: what stablecoins mean for Europe, Jürgen Schaaf, an adviser in the market infrastructure and payments area of the ECB, puts dollar stablecoins at about 99 percent of total stablecoin market capitalization and euro stablecoins below 350 million euros. Market analysts cited by Jürgen Schaaf expect US stablecoin supply to grow from 230 billion dollars in 2025 to 2 trillion by the end of 2028.
Two risks follow for the euro area: interest-bearing stablecoins could draw deposits from banks, which fund most of their lending with deposits. And wide use of dollar stablecoins could weaken ECB control over monetary conditions, as in dollarized economies. An ECB working paper found that stablecoin adoption can shift deposits away from banks and that dollar-pegged tokens could import US monetary conditions into the euro area.
Multi-issuance: one token, two issuers
A multi-issuer scheme is a stablecoin issued jointly by an EU entity and a non-EU entity, with tokens that are legally identical and reserves split across both places. The European Systemic Risk Board adopted Recommendation ESRB/2025/9 on these schemes. In a run, holders outside the EU could redeem from the EU issuer, where MiCA forbids redemption fees, and leave EU holders exposed. The ESRB asked the European Commission to treat such schemes as not permitted under MiCA, and otherwise asked authorities for safeguards, most of them by the end of 2026.
ECB terms for euro stablecoins
In that blog post, Jürgen Schaaf supports properly regulated euro stablecoins, designed to high standards and with effective risk mitigation. Next to them the ECB places the digital euro for payments at the point of sale, and settlement of tokenized assets in central bank money through its Pontes and Appia work. For banks, the ECB has pointed to tokenized deposits, which carry the credit quality of regulated institutions.
Upcoming events on stablecoins and the digital euro
Finance Loop and the ECB stablecoin debate
The ECB has its seat in Frankfurt, where Finance Loop is based; the ECB in Frankfurt is part of the financial center. Finance Loop is partner of the Digital Euro Association, whose Digital Euro Conference brings speakers from central banks, commercial banks and fintechs together on the digital euro and stablecoins. At Capital & Code, with Finance Loop as media partner, the Bundesbank debates central bank money against tokenized deposits and stablecoins.
Payments & Digital Money
Risk & Compliance
Is the ECB against stablecoins?
The ECB sees risks for bank funding and monetary sovereignty, mainly from dollar stablecoins. The ECB supports well-regulated euro stablecoins and wants the digital euro and settlement in central bank money next to them.
What are multi-issuance stablecoins?
Multi-issuance stablecoins are tokens issued jointly by an EU company and a company outside the EU, with identical tokens and reserves in both places. The ESRB asked the Commission not to treat them as permitted under MiCA.
How does the digital euro relate to stablecoins?
The digital euro would be central bank money for everyday payments, while a stablecoin is a claim on a private issuer. The stablecoin vs CBDC answer compares the two.
The ECB, stablecoins and Finance Loop
Finance Loop covers the stablecoin policy of the ECB in its Payments & Digital Money track, next to the digital euro and tokenized deposits. Finance Loop is media partner of Capital & Code, hosted by the euro stablecoin issuer AllUnity in Frankfurt, and partner of the Digital Euro Association.
Finance Loop is a professional network supporting the institutional use of emerging technologies in finance, such as AI, digital payments, cloud and blockchain solutions. Finance Loop helps its members build skills and personal networks in these fields: Investment & Digital Assets, Payments & Digital Money, Digital Infrastructure & Sovereignty, and Risk & Compliance.