Stablecoins are growing fast. Most of the $255 billion sector is currently concentrated in U.S. dollar-backed tokens, which account for $241 billion of that total, according to RWA.xyz data.
Former European Central Bank board member and chair of Société Générale, Lorenzo Bini Smaghi, has said that the imbalance could sideline Europe in the next phase of global finance.
Writing in the Financial Times, Bini Smaghi noted that the European Union already has the Markets in Crypto-Assets (MiCA) law, which forces issuers to back tokens with cash and high-grade sovereign bonds.
The bloc also runs a pilot regime for trading on distributed ledgers. Yet the euro barely features in today’s stablecoin market because banks and policymakers shy away from the new technology, he wrote.
Société Générale, it’s worth adding, launched its own euro-backed stablecoin back in 2023. Last month, it also launched a U.S. dollar-backed one.
He says the hesitation risks European monetary sovereignty. If consumers and companies adopt dollar stablecoins for everyday payments and savings, deposits could drain from euro-area banks to US-linked platforms.
That shift would erode the ECB’s grip on money flows and blunt its ability to steer rates or calm markets, Bini Smaghi added. He argued that regulators should lean in, not block progress.
By sponsoring euro-pegged tokens and coordinating standards, the ECB could modernize cross-border payments and help unify Europe’s capital markets.
Should Europe stay on the sidelines, “it will be accepting its marginalization in the future of global finance,” he wrote.