EU calls for increase in euro-pegged stablecoins amid US dominance

Europe needs more euro-denominated stablecoins, French Finance Minister Roland Lescure said on Friday, and called on the bloc's banks to explore the use of tokenized deposits to help end US dominance in digital payments, UNN reports with reference to Reuters.

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In a pre-recorded speech at a crypto conference in Paris, Lescure said that the relatively small volume of euro-pegged stablecoins compared to dollar-pegged stablecoins was "unsatisfactory."

Banks worldwide are experimenting with stablecoins – a type of cryptocurrency designed to maintain a constant value and backed by traditional currencies. Several banks have joined forces to test this technology, especially after US President Donald Trump signed a law last year establishing rules for stablecoins.

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However, the stablecoin market is dominated by El Salvador-based Tether, and these coins are primarily used for cryptocurrency trading, with their role in payments remaining minimal. According to an analytical note published this week, two-thirds of European banks surveyed by RBC Capital Markets said that demand for stablecoins remains limited.

A group of European banks, including ING, UniCredit, and BNP Paribas, has formed a company to launch a euro-pegged stablecoin in the second half of 2026, which they hope will counter US dominance in digital payments.

"This is what we need, and this is what we want," Lescure said on Friday, speaking about the initiative. "I also strongly encourage banks to continue exploring the possibility of launching tokenized deposits," he added. Tokenization involves creating blockchain-based tokens that replace existing financial assets.

European policymakers are trying to reduce dependence on non-European payment systems due to strained relations with the US, which have heightened fears about the fragmentation of payment services in the EU.

The European Central Bank is developing a digital euro to preserve the role of central bank money in the digital economy, although banking lobbies in some countries are resisting these plans, and progress in the European Parliament is slow.

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On Friday, Lescure said he supported the ECB's plans for a central bank digital currency at the heart of tokenization efforts, calling it the "right balance."

Tether states that over $185 billion in dollar-pegged tokens are in circulation. Societe Generale says its euro-pegged stablecoin, launched in 2023, is only in circulation at 107 million euros ($126 million).

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