Ex-ECB Official Warns Europe Risks Losing Financial Clout Without Euro Stablecoin Support

Former European Central Bank board member Lorenzo Bini Smaghi has issued a stark warning: Europe's hesitation to embrace euro-denominated stablecoins could diminish its role in the next era of global finance. The $255 billion stablecoin market remains overwhelmingly dominated by U.S. dollar-pegged tokens, with euro-backed alternatives accounting for just a fraction of the total.

Despite establishing regulatory frameworks like MiCA and piloting distributed ledger trading, European institutions continue to lag in stablecoin adoption. Société Générale's 2023 euro stablecoin launch and recent dollar-pegged offering highlight this paradox—even European banking giants hedge their crypto bets with dollar products.

The stakes transcend market share. Bini Smaghi argues dollar stablecoin adoption for payments and savings could trigger capital flight from eurozone banks to dollar-linked platforms, eroding the ECB's monetary policy leverage. His solution: proactive regulatory engagement rather than defensive obstruction.