Overview

• US dollar-pegged tokens such as Tether’s USDT and Circle’s USDC now make up 99% of the roughly $270 billion global stablecoin market, while euro-denominated alternatives hold under €350 million in value.
• Schaaf cautions that growing use of dollar-backed stablecoins for payments, savings or settlements could undermine the ECB’s ability to manage interest rates and liquidity in the euro area.
• Interest-bearing features on certain stablecoins risk diverting funds from traditional banks and jeopardising credit intermediation across Europe’s financial system.
• The ECB adviser urges EU policymakers to fast-track the rollout of a digital euro and to support regulated euro-pegged stablecoins as a defence of monetary sovereignty.
• He calls for stronger international coordination on stablecoin rules to prevent regulatory arbitrage and counterbalance the strategic advantages of US dollar dominance.