Former ECB official warns Europe to support euro stablecoins to prevent being sidelined in finance

Stablecoins, a $255 billion sector, are mostly U.S. dollar-backed. Former ECB board member warns Europe risks being sidelined in global finance due to lack of involvement in stablecoin market. Société Générale launched euro-backed and U.S. dollar-backed stablecoins in 2023. European monetary sovereignty at risk if euro is not involved.

The Euro barely features in stablecoin market due to banks and policymakers shying away from new technology. Hesitation risks ECB’s control over money flows and ability to steer rates. Bini Smaghi argues regulators should embrace stablecoins to modernize payments and unify Europe’s markets.

Bini Smaghi urges ECB to sponsor euro-pegged tokens and set standards to modernize payments and unify capital markets. Failure to do so risks Europe’s marginalization in future of global finance. Euro-area banks could see deposits drain to US-linked platforms if consumers adopt dollar stablecoins for payments and savings.

Read more at Yahoo Finance: Ex-ECB Official Urges Europe to Back Euro Stablecoins or Risk Losing Financial Power