Why Is Europe Calling for More Euro-Based Stablecoins?
Europe needs to accelerate the development of euro-denominated stablecoins to reduce reliance on U.S.-linked digital payment infrastructure, according to French Finance Minister Roland Lescure. Speaking at a crypto conference in Paris, Lescure said the relatively low volume of euro-pegged stablecoins compared with dollar-based alternatives was “not satisfactory.”
The comments reflect growing concern among European policymakers that the current structure of digital payments reinforces dollar dominance, particularly as stablecoins become more embedded in global financial flows. While stablecoins are still primarily used within crypto markets, their potential role in payments and settlement has placed them at the center of broader monetary and financial sovereignty debates.
Dollar-backed stablecoins continue to dominate issuance and usage. Tether alone has more than $185 billion in circulation, highlighting the scale gap Europe faces as it attempts to build a competing ecosystem anchored in the euro.
Can European Banks Close the Gap?
Several major European banks, including ING, UniCredit and BNP Paribas, are working on a joint initiative to launch a euro-pegged stablecoin in the second half of 2026. The project is designed to provide a regional alternative that can support payments and reduce dependence on non-European providers.
“That is what we need and that is what we want,” Lescure said, referring to the initiative. He also urged banks to expand efforts around tokenised deposits, which use blockchain-based representations of traditional bank deposits to enable faster and more flexible settlement.
Despite these efforts, adoption remains limited. A recent RBC Capital Markets survey found that two-thirds of European banks see weak demand for stablecoins, suggesting that the gap is not only on the supply side but also tied to uncertain use cases in payments and commerce.
Investor Takeaway
How Does Tokenisation Fit Into Europe’s Strategy?
European policymakers are increasingly linking stablecoins with broader tokenisation efforts across financial markets. Tokenised deposits are seen as a complementary model that keeps activity within the banking system while leveraging blockchain infrastructure.
“I also strongly encourage banks to further explore the launch of tokenised deposits,” Lescure said. The approach is intended to offer a controlled pathway for digital assets to integrate with existing financial frameworks, particularly in regulated environments.
The European Central Bank is also advancing plans for a digital euro, which policymakers view as a foundation for tokenised financial activity. Lescure described the ECB’s approach as “the right balance,” supporting the idea of a central bank-backed anchor within a broader digital asset ecosystem.
Investor Takeaway
What Structural Challenges Does Europe Face?
Europe’s push comes amid broader efforts to reduce reliance on external payment providers, particularly as geopolitical tensions with the United States have raised concerns about financial fragmentation. However, the region faces structural challenges in scaling its digital asset ecosystem.
Stablecoins are still used primarily for crypto trading rather than payments, limiting their immediate impact on traditional financial systems. Meanwhile, existing euro-pegged offerings remain small. Societe Generale’s stablecoin, launched in 2023, has around 107 million euros in circulation, a fraction of dollar-backed competitors.
Progress on the digital euro has also been slow, with resistance from parts of the banking sector and ongoing debate within the European Parliament. These delays highlight the difficulty of aligning policy, market demand, and institutional incentives in building a competitive alternative to dollar-based digital finance.
