Gramegna’s core concern is simple: tokens that promise stability but lack credible backing or supervision can unravel in a crisis and spread contagion. He called for transparent, enforceable standards—capital, liquidity, disclosures—that let stablecoins plug into the monetary system safely, much like traditional financial institutions.

Europe’s dependence on dollar stablecoins

Another red flag: the market is overwhelmingly dominated by U.S. dollar-linked coins. Europe, Gramegna argued, shouldn’t be reliant on non-euro instruments for its digital payments plumbing. He urged policymakers to support euro-denominated stablecoins from European issuers and to design a digital stack where cash, a potential digital euro (CBDC), and well-regulated stablecoins coexist.

Eurogroup President Paschal Donohoe echoed the need to innovate, noting a digital euro could still bring clear benefits for commerce across the bloc. More broadly, EU officials see euro-backed stablecoins as a necessary counterweight to dollar-centric tokens.

Why the urgency?

Major institutions are increasingly vocal. The IMF has warned that a roughly $300B stablecoin market can complicate monetary policy and credit conditions. The BIS, too, has flagged the risk of instability if these instruments expand without strict, consistent rules.

Regulators also know stablecoins are marketed as “safe” because they’re tied to assets like cash or short-term government bonds. But if reserves are weak, opaque, or hard to liquidate in stress, the “stable” promise can break—putting consumers, institutions, and payment rails at risk.

MiCA sets the bar—and banks are circling

The EU’s Markets in Crypto-Assets (MiCA) framework is Europe’s answer: capital and liquidity requirements, governance checks, and stress testing for significant issuers. Several European banks are already exploring euro-stablecoins that would comply with MiCA, suggesting a path to scale with safeguards.

The bigger prize: digital sovereignty

For Gramegna, this is as much about strategy as safety. Europe shouldn’t let its future payments networks be controlled by non-European firms. The goal is a trusted, competitive ecosystem—where innovation in stablecoins and tokenized assets thrives inside clear rules, and where European money (in both physical and digital form) remains the backbone of European finance.