Stableecoins are growing fast. Most of the $ 255 billion sector is currently concentrated in US dollar-backed tokens, which accounts for $ 241 billion of the total amount, according to RWA.xyz data.
The former European Central Bank board member and chairman of société Générale, Lorenzo Bini Smaghi, has said that the imbalance could sideline Europe in the next phase of global funding.
Writing in the Financial Times noted Bini Smaghi that the European Union already has the markets in crypto assets (Glitter) Law that forces issuers to support tokens with cash and high quality sovereign bonds.
The block also runs a pilot regime for trading in distributed headbooks. Still, euro hardly contains today’s stableecoin market because banks and decision makers stay away from the new technology, he wrote.
Société Générale, it’s worth adding, launched its own euro-backed stableecoin back in 2023. Last month, it also launched an American dollar support.
He says hesitation risks European monetary sovereignty. If consumers and businesses adopt dollar stableecoins for everyday payments and savings, deposits can drain from banks in the euro area to US-connected platforms.
This shift would erode the ECB’s grip on money flowing and blunt its ability to control prices or calm markets, Bini Smaghi added. He argued that regulators should lean in and not block progress.
By sponsoring Euro-Pegged tokens and coordination standards, ECB could modernize cross-border payments and help unite Europe’s capital markets.
If Europe remains on the sidelines, “it will accept its marginalization in the future of global funding,” he wrote.
