ECB Proposes Issuing Euros Directly on Blockchain, Threatens Stablecoin Market

The European Central Bank (ECB) has proposed issuing euros directly onto a blockchain. Isabel Schnabel, an executive board member of the ECB, made this case at the Jackson Hole symposium on Friday and emphasized her opposition to stablecoins as settlement money. She pointed out that in times of panic, when everyone wants cash at once, a central bank can create more of it, whereas a stablecoin issuer cannot.

Schnabel used the banking panic of 1907 as an example, where money was tied to banks' holdings of government bonds, and thus the money supply could not expand. She argued that stablecoins are best understood as complements to central bank money, rather than substitutes for it.

The ECB's move comes as Europe is moving towards a more digital economy. The total market capitalization of dollar-pegged stablecoins stands at $304 billion, while euro-pegged tokens hold under $1 billion. A project called Pontes will go live in September 2026, linking TARGET Services to market blockchain platforms for atomic settlement in central-bank money.