Euro Stablecoin Dominance Threatens European Monetary Sovereignty

European Merchant Bank (EMBank) Chairman Ekmel Çilingir has sounded the alarm on the dominance of US dollar stablecoins in the global market. In a recent article, Çilingir noted that while the global stablecoin market had reached around $300 billion by mid-2023, more than 99% of its value was denominated in US dollars.

Euro stablecoins accounted for less than €1 billion, and Çilingir argues that this dominance poses a threat to Europe's monetary sovereignty. He points out that the issue concerns the financial infrastructure being built around digital assets, where businesses and developers have stronger incentives to use widely accepted currencies.

Çilingir suggests that euro stablecoins could help protect Europe's position in the market by providing a less volatile means of transferring value within crypto markets. However, he notes that regulation alone is not enough, and broader adoption will depend on factors such as liquidity, distribution, banking access, platform support, and clear commercial uses.

The article also considers the impact of the Markets in Crypto Assets Regulation (MiCA), which provides common rules for stablecoin issuance. Çilingir recognizes the importance of this framework but argues that it is only a starting point. He suggests that euro stablecoins and a future digital euro could serve different purposes, with private stablecoins used across payment platforms, smart contracts, and tokenized financial markets.