The ECB warned EU finance ministers that expanding euro stablecoin issuance could weaken bank lending and complicate monetary policy.
The European Central Bank warned EU finance ministers on Friday that proposals to expand euro stablecoin issuance could weaken bank lending and complicate monetary policy, according to three sources cited by Reuters.
The pushback came in response to a policy paper prepared by Brussels-based think tank Bruegel, whose authors presented their proposals at the two-day informal meeting of the Economic and Financial Affairs Council in Nicosia, Cyprus. The paper called for easing liquidity requirements for stablecoin issuers and potentially granting them access to ECB funding, arguing that these measures were necessary if the euro stablecoin market was to compete with dollar-backed rivals.
Europeans conduct 38% of global stablecoin transactions, yet euro-denominated tokens account for just 0.3% of total supply, per the policy paper. Circle’s EURC (EURC), the largest euro stablecoin, ranks only 12th globally, according to CoinMarketCap.
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