ECB: Rejects Euro Stablecoin Liquidity Rules

ECB rejected a Bruegel proposal on May 22 that would have eased liquidity rules and granted potential central bank access for euro stablecoin issuers, citing risks to bank deposits and monetary policy transmission. Europe accounts for 36% of global stablecoin volume while euro-denominated stablecoins represent just 1% of total supply, highlighting strategic lag against USD stablecoin dominance. Thirty-seven banks joined Qivalis with backing from France and the European Commission to build private euro stablecoins, yet the central bank favors tokenized commercial bank deposits that remain years from scale. The GENIUS Act already gives the US a regulatory framework while Europe debates four-year timelines for public solutions, allowing dollar stablecoins to embed deeper in local usage patterns.