- The ECB warns that US stablecoin laws could trigger a major capital shift from European to dollar-backed digital assets.
- The European Commission rejects ECB concerns, saying current MiCA laws already control stablecoin risks and issuer limits.
- EU finance officials remain divided on immediate law changes as US bills STABLE and GENIUS gain momentum.
The European Central Bank (ECB) has issued a warning about growing support for dollar-based stablecoins, citing risks to the eurozone’s financial stability. A recent paper presented by the ECB highlights its concern that new US legislation could fuel an influx of capital into American-backed digital assets.
Two proposed bills in the United States, the STABLE Act and the GENIUS Act, aim to broaden the reach of US dollar-backed stablecoins. The ECB believes this legislative push may lead to a surge in dollar-denominated digital tokens, undermining the euro’s position in global finance and prompting liquidity stress in European banks.
ECB Seeks Adjustments to EU Crypto Rules
The ECB has called for modifications to the Markets in Crypto-Assets (MiCA) regulation, expressing concern that the current rules may not be strong enough to counter the rising influence of foreign stablecoins. The bank argues that without changes, the EU could face increased exposure to financial shocks triggered by token redemption demands from both local and international holders.
The European Commission has dismissed these warnings, saying the risks are already managed under MiCA. In its paper, the Commission stated that the law clearly defines who can issue stablecoins and in what volumes. It added that platforms in the EU have already started to limit the use of stablecoins like Tether in response to MiCA.
Divided Views Among EU Officials
The divide between the ECB and the Commission became public after an April 14 finance ministers’ meeting. Despite the ECB’s push for urgent regulatory updates, most EU member states did not support immediate changes. Diplomats reported a clear difference in how both sides assess the risk of US stablecoin dominance.
Beyond immediate financial risk, the ECB also raised broader concerns over long-term financial independence. It warned that increasing reliance on dollar-backed tokens could weaken EU efforts to build an independent financial system and concentrate market control in the hands of non-European issuers.
