Stablecoins and digital euro: friends or foes of European monetary policy?

In this paper, we analyse potential impacts that dollardenominated stablecoins could have on monetary policy. We also consider related questions about the introduction of the digital euro. Based on our findings, the adoption of stablecoins in Europe is unlikely to be large-scale without state support. The development of the digital euro with full state and central bank backing is more likely to succeed. To be a viable alternative to private payment options, the digital euro needs to be carefully designed.

This document was provided by the Economic Governance and EMU Scrutiny Unit at the request of the Committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 23 June 2025.