With the growing influence of stablecoins, Europe faces serious challenges in monetary policy and financial stability. The report from the Bank of France highlights the risks and proposes measures to strengthen sovereignty.
Stablecoins as a Threat to Global Economy
Stablecoins are becoming increasingly dangerous for the global financial system. The Bank for International Settlements described them as "ineffective and dangerous for the global economy." According to Agnès Bénassy-Quéré, Deputy Governor of the Bank of France, stablecoins carry risks relating to liquidity, cybersecurity, manipulation, and fraud. These risks threaten Europe’s monetary sovereignty, especially given the dominance of dollar-backed stablecoins like USDT and USDC.
Digital Euro: Europe's Response to Challenges
In response to the threats posed by stablecoins, Europe is developing the digital euro project, aimed at ensuring monetary autonomy. Governor of the Bank of France, François Villeroy de Galhau, emphasized that the distribution of the digital euro will involve a partnership with commercial banks. This initiative, supported by the European Central Bank, is expected to be realized by the end of 2025.
Strategic Implications of Stablecoin Competition
As stablecoins become a significant financial tool, they influence strategic decisions in the global economy. They are utilized in decentralized finance (DeFi) and are beginning to integrate within major tech ecosystems. European voices are calling for strict regulation, yet the dominance of American stablecoins continues to grow. The conflict between the dynamic developments in the U.S. and the caution in Europe creates tension in the markets.
As the influence of stablecoins expands, Europe must find a balance between regulation and innovation to protect its financial sovereignty and maintain stability.
