EU Strategy for Euro Stablecoins: Enabling Onchain Capital Markets

The success of European economic integration has depended on the continuous evolution of the financial system in response to the changing needs of consumers and businesses. Today, those needs are changing again, and fast.

European businesses operate across global supply chains and serve increasingly international customer bases. Consumers transact more frequently across borders. While ongoing efforts aim to improve existing payment and settlement systems, the implementation of reforms takes time, and fragmentation and inefficiencies remain. Cross-border transfers continue to be expensive and securities settlement still takes days. These delays reflect a system originally built along national silos, driving complexity and slowing capital flows. Distributed ledger infrastructure, combined with stablecoins as a shared settlement asset, offers a clear path forward. This would enable assets and cash to move on global, interoperable networks and reduce reliance on legacy systems.

Financial institutions around the world are moving assets and services onto blockchain infrastructure to benefit from faster settlement, continuous market operation, and programmability. Citizens and businesses increasingly demand financial infrastructure that is open, low-cost, high-speed, and interoperable across borders. Stablecoins are uniquely positioned to meet these needs. They provide a digital form of fiat money that is native to blockchain networks and capable of supporting tokenised markets at scale.

This technology is increasingly recognised in other major jurisdictions, including the United States and innovation hubs in Asia and the Gulf, which are enabling tokenised markets with stablecoins as a key settlement asset. If the EU wants to remain competitive in global capital markets and preserve the international relevance of the euro, it must act with similar ambition. Without the widespread availability of competitive euro-denominated stablecoins, market participants will increasingly rely on dollar-based alternatives.

Recent debate among policymakers and central banks has often framed stablecoins primarily through the lens of financial stability, monetary sovereignty, or competition with public money. This approach has contributed to a more cautious stance toward privately issued digital money and, in discussions of institutional use, a preference for central bank digital currencies. But this framing is incomplete. Stablecoins are not simply a new payments product. They are increasingly becoming strategic infrastructure for digital financial markets.

A more proportionate assessment shows that stablecoins pose no systemic threat to Europe. Properly regulated, they are a strategic opportunity. Euro stablecoins can complement other forms of money, improve the functioning of capital markets, reduce cross-border friction, and strengthen the EU’s ability to shape the future of global finance. They can facilitate the growth of tokenised markets, and help unlock the agentic commerce of the near future.

An effective EU stablecoin strategy should therefore aim to ensure that stablecoins support continued investment in the European economy through demand for high-quality euro-denominated backing assets, strengthen the role of the euro in global tokenised markets by enabling meaningful wholesale use cases, compete on a level playing field with other forms of money including the digital euro, and operate on scalable, interoperable public blockchains rather than being confined to isolated or closed infrastructure.

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