Last week we published an analysis of a report from Brussels think tank Bruegel encouraging Europe to support euro stablecoins to avoid dollar stablecoins gaining traction in trading environments. The paper was in preparation for an informal meeting of European central bankers and finance ministers in Nicosia and was presented during the event by authors Lucrezia Reichlin, Bo Sangers and Jeromin Zettelmeyer. Reuters reported that the European Central Bank (ECB) and other central bankers pushed back on the Bruegel proposals, citing sources.
The Reuters article reported that the ECB was concerned euro stablecoins would make bank deposits more fickle, central bankers resisted the idea of the ECB acting as lender of last resort to stablecoin issuers, and policymakers believe the monetary sovereignty threat is overstated. Each raises questions that go beyond the immediate debate.
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