Overview

• Europe’s risk board endorsed a prohibition on stablecoins jointly issued in the EU and abroad, a step that still requires action by the Commission, Parliament and national regulators to take effect.
• Regulators warn the multi-issuance model can trigger EU-focused redemption runs and reserve mismatches during stress, leaving local reserves exposed to liabilities outside the bloc.
• ECB President Christine Lagarde has compared the risks to past cross-border banking crises and signaled that such schemes would require strong equivalence regimes and safeguards.
• A ban or tighter rules would force U.S.-based issuers such as Circle and Paxos to reshape their EU operations, though officials have not reached a legal decision and the ECB lacks direct rulemaking authority.
• Dollar-pegged tokens account for 99% of the $230 billion stablecoin market versus 0.15% for euro tokens, sharpening sovereignty concerns as nine European banks plan a MiCA-regulated euro stablecoin for 2026 and the ECB targets a digital euro launch in 2029.