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The European Commission plans to issue guidance to treat non-EU stablecoins as equivalent to EU-approved tokens
European Central Bank President Christine Lagarde has warned that this move could pose risks to monetary policy and financial stability
The Commission has dismissed concerns, saying well-collateralized stablecoins are unlikely to face mass redemptions

As Brussels prepares to unveil formal guidance on stablecoins, a clash has emerged at the heart of the European Union’s (EU) financial establishment. The European Commission is pushing to treat foreign-issued stablecoins as equivalent to those backed within the bloc, helping to close regulatory gaps and support innovation in payments. However, the European Central Bank has warned that this could undermine Europe’s financial resilience in times of stress. The Commission’s move has been spurred by America’s race to regulate stablecoins through the GENIUS Act, and Europe does not want to be left behind.

Brussels Moves Ahead Despite Warnings

The European Commission’s proposed regulation of stablecoins is still at the planning stage, but it is understood that the forthcoming guidance will allow stablecoins issued outside the EU to be used much like EU-approved tokens. While the move is designed to foster a single market for digital payments, the ECB sees it as dangerously premature; President Christine Lagarde has publicly warned that such coins, particularly those issued by private firms, threaten the stability of the banking system and monetary control.

If consumers shift deposits into stablecoins during market stress, she argues, banks could face a dangerous shortfall in liquidity, especially if the collateral backing those tokens sits outside Europe’s reach.

Despite these concerns, Brussels is standing firm. A spokesperson for the Commission said, “A run on a well-governed and fully collateralized stablecoin is very unlikely,” emphasizing that any large-scale redemptions would likely happen in jurisdictions outside the EU. Rather than imposing bloc-wide legal guarantees, the Commission wants national regulators to evaluate and approve stablecoin projects individually. This hands-off approach reflects a broader appetite in Brussels to avoid stifling financial innovation, even if it means brushing aside the ECB’s reservations.

America Leads, Europe Follows

The global stablecoin market already exceeds $250 billion and could expand dramatically in the years ahead, which explains why governments are trying to wrestle regulations into shape. While the U.S. is moving toward a federal licensing model through the GENIUS Act, the EU’s new guidance signals a willingness to treat foreign stablecoins as legitimate infrastructure—at least for now. Meanwhile, the ECB is accelerating work on its own digital euro, a sovereign response designed to counterbalance the growing influence of private digital currencies.

The tension between the ECB and the European Commission reflects a deeper policy divide: should Europe embrace private innovation at the expense of central control, or build safeguards before widespread adoption? As the guidance is finalized, that debate will shape the continent’s digital future.

The post European Commission Set to Announce Stablecoin Integration appeared first on FullyCrypto.

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Filed under: Bitcoin - @ June 26, 2025 7:12 am