On March 10, 2025, European Stability Mechanism managing director Pierre Gramegna raised alarms regarding the implications of U.S. government-backed stablecoins on the European financial landscape. Known for their potential to disrupt traditional banking systems, these USD-denominated stablecoins pose risks not only to financial stability but also to the sovereignty of the Euro zone.
Gramegna’s concerns echo the previous fallout from Facebook’s attempt to launch its cryptocurrency, Libra. While the launch was thwarted due to legal implications and regulatory scrutiny, the current pro-crypto climate in the U.S. suggests that similar initiatives could resurface, potentially bringing severe challenges to Europe’s financial infrastructure.
During a recent Eurogroup press conference, Gramegna articulated the risk posed by tech giants that may capitalize on U.S. support to launch their cryptocurrencies, reminiscent of Facebook’s past efforts. He stated, “The U.S. administration has shifted towards a favorable view of cryptocurrencies, particularly dollar-pegged stablecoins, which raises legitimate concerns for the EU.”
The European population, particularly the 260 million daily Facebook users, creates a massive audience for any new payment system that such tech giants might propose. If these services gain traction, non-euro payment methods could siphon significant liquidity away from the European economy towards the U.S., threatening financial stability. Gramegna voiced this concern, suggesting that alternative payment systems could lead to the centralization of financial control, introducing risks related to technical security
Historically, European officials have attempted to thwart such initiatives. The rhetoric surrounding Facebook’s Libra in 2019 was clear, with bureaucrats citing the need to protect financial sovereignty against systems that could operate independently from European regulations. Former French Finance Minister Bruno Le Maire famously stated that “Libra represents a systemic risk due to its potential user base of two billion people.” The question now remains, will future U.S. initiatives face similar resistance?
In response to these challenges, financial authorities in Europe have accelerated their efforts toward introducing a digital euro. Gramegna emphasized the urgent need for a European Central Bank Digital Currency (CBDC) to ensure monetary sovereignty. He remarked, “The Digital Euro is more necessary today than ever.” European policymakers are also considering amendments to current regulations to strengthen their position against these foreign innovations.
Despite the flaws of such initiatives, Europe has a solid foundation to counter U.S. influence through the digital euro. Nevertheless, the traction of euro-denominated stablecoins appears insufficient, as major competitors like Tether’s USDT and Coinbase’s USDC dominate the market. Statistics reveal that the leading stablecoins are overwhelmingly dollar-pegged, with the first notable euro-pegged stablecoin barely making it into the top 30.
In conclusion, while the European financial landscape faces a formidable challenge from U.S. stablecoins, there remains hope through the digital euro and regulatory responses. The question of financial sovereignty continues to loom large, as Europe endeavors to retain its monetary independence amidst the shifting tides of global finance.
