EU Stablecoin Issuers Push for Regulated Dollar Tokens Amid Euro Strengthening

European stablecoin issuers are pushing to offer regulated US dollar tokens, arguing that the EU's efforts to strengthen the euro do not eliminate the practical need for dollar liquidity in cross-border commerce and payments.

On Wednesday, the German issuer AllUnity launched its MiCA-regulated US dollar-pegged stablecoin USDAU, expanding its lineup beyond euro-denominated offerings. AllUnity CEO Alexander Höptner said that in global trade and FX markets, the dollar remains a central 'glue' for settlement, an outcome that cannot be replaced by issuing more euro tokens.

The push for dollar tokens comes as the EU continues to reassess its regulatory approach to crypto. The European Central Bank (ECB) has raised concerns about stablecoins reinforcing the dollar's dominance.

Despite the EU's efforts to strengthen the euro, industry players emphasize that policymakers can shape issuers and rules, even if dollar demand remains.

Regulated dollar tokens can reduce friction in cross-border settlement between Europe, the UK, and North America, according to Fiat Republic CEO Adam Bialy.

The market size of locally issued dollar stablecoins remains small compared to dominant global tokens, with USDSM and USDCV at roughly $13 million each, versus $184 billion for Tether USDt (USDT) and $74 billion for Circle's USDC.