Ex-ECB Official Warns Europe Risks Losing Financial Power Without Euro Stablecoin Adoption

Former European Central Bank board member Lorenzo Bini Smaghi has issued a stark warning about Europe's lagging position in the stablecoin market. With dollar-pegged tokens dominating the $255 billion sector, the euro remains conspicuously absent from this critical financial innovation.

The Markets in Crypto-Assets (MiCA) framework provides regulatory clarity, yet European institutions remain hesitant. Société Générale's 2023 euro stablecoin launch and recent dollar-pegged offering demonstrate institutional capability, but broader adoption stalls.

This reluctance threatens monetary sovereignty as dollar stablecoins gain traction for payments and savings. Deposit migration to dollar-based platforms could undermine the ECB's monetary policy effectiveness, potentially eroding its control over money flows and market stabilization tools.