Officials warn that foreign-issued stablecoins could shift liquidity away from the eurozone
The European Central Bank (ECB) has warned that U.S. President Donald Trump’s pro-crypto agenda could destabilize the eurozone’s financial system, urging urgent changes to the EU’s crypto regulation.
In a policy paper seen by POLITICO, the ECB argued that the Markets in Crypto Assets (MiCA) law is too lenient on cross-border stablecoin arrangements and may not withstand growing risks from a U.S. crypto resurgence.
At the center of the concern is the “multi-issuance” model, where stablecoins are issued jointly by European and non-European firms. The ECB said this structure could leave European issuers exposed to redemption demands on both sides of the Atlantic, potentially triggering a “run” on reserves.
ECB President Christine Lagarde reinforced the call for reform last Thursday, stating that MiCA would have to change and suggesting the risks are now “understood” by the European Commission and other institutions.
The central bank fears a surge in dollar-backed stablecoins could draw European capital into U.S. treasuries and undermine the bloc’s monetary independence.
Tensions grow as Commission dismisses ECB’s concerns as overstated
The European Commission has pushed back strongly on the ECB’s call to rewrite MiCA rules over cross-border stablecoin risks, defending the legal framework and rejecting the ECB’s “fundamental misreading” of MiCA.
In its own internal paper, also reviewed by POLITICO, the Commission said the ECB had overstated the risks posed by global stablecoins and argued that existing rules are “manageable under the existing legal framework”.
One EU official said the notion of a traditional bank run on stablecoins was “nonsense”. The official also accused the ECB of amplifying the “stablecoin menace” to gather support for its digital euro initiative, which is expected to launch by October.
Despite these arguments, the ECB maintains that dollar-based stablecoins could deepen an already lopsided market, where non-EU issuers have an “oligopolistic market position”.
The central bank fears this could force EU-based firms to redeem both domestic and foreign tokens, amplifying liquidity risk during periods of stress.
Crypto rules tested as Europe weighs financial sovereignty
The disagreement comes just months after MiCA was fully enacted, with the law hailed as a global benchmark for crypto oversight.
Yet the ECB contends that the current regime leaves gaps in scenarios involving cross-border token activity. Foreign political shifts, such as Trump’s embrace of stablecoins, could expand the industry’s footprint.
According to sources present at a recent meeting of top EU financial officials, few member states supported the ECB’s proposal to revise MiCA immediately.
The Commission emphasized that existing rules should be enforced before any hasty amendments, noting that only one global stablecoin has been authorized under MiCA.
Still, the ECB argues that Europe’s monetary sovereignty could be eroded if eurozone savings are increasingly tied to assets linked to U.S. fiscal policy.
It has called for the power to block stablecoin issuers that pose systemic risks, even as the Commission insists such tools already exist within MiCA’s framework.
