ECB Proposes On-Chain Euro for Wholesale Settlement
The European Central Bank (ECB) has proposed issuing euros directly onto a blockchain for interbank settlement, marking a significant shift in the crypto banking landscape.
This proposal, made by Executive Board member Isabel Schnabel at the Jackson Hole symposium on August 30, 2026, targets wholesale settlement and could reshape crypto banking, forcing treasuries to rethink their reliance on stablecoins.
Schnabel argued that tokenized markets need an asset only a central bank can create, citing the banking panic of 1907 as an example. She emphasized that a central bank can create unlimited liquidity in times of crisis, whereas stablecoin issuers cannot.
The ECB's proposal is not about issuing a digital euro for retail payments but rather to provide a settlement asset with central-bank backing for tokenized markets. This move could affect businesses using stablecoins for international payments, as they may need to consider holding the central bank asset instead of private stablecoins.