22-4-2025 – The European Central Bank (ECB) has sounded grave concerns over America’s growing embrace of cryptocurrency markets, warning of potential upheaval in European financial stability. The warning comes amid mounting tensions between EU institutions over the adequacy of existing regulatory frameworks.
At the crux of the dispute lies the burgeoning stablecoin market, now commanding a hefty $234 billion valuation. The ECB’s policy document specifically highlights how proposed American legislation—the STABLE and GENIUS Acts—could trigger an unprecedented surge of dollar-linked stablecoins into European territories.
Industry expert Mikko Ohtamaa has laid bare the EU’s missed opportunities in stablecoin innovation. Taking to X (formerly Twitter), he lambasted the bloc’s stringent regulations, shaped heavily by traditional banking interests, which have stymied the development of competitive European stablecoin alternatives.
Lagarde worried Digital Euro, MiCA, are failures and the US will dominate the stablecoin business.
The worry is warranted. However, the EU had the first mover advantage with the regulation and they screwed it up. No EU stablecoin is internationally competitive because the… pic.twitter.com/IXExwrFPzQ
— Mikko Ohtamaa (@moo9000) April 22, 2025
A notable rift has emerged between Brussels and Frankfurt, with the European Commission maintaining that the recently enacted Markets in Crypto-Assets Regulation (MiCA) provides robust safeguards. This stance directly contradicts the ECB’s urgent calls for regulatory reinforcement, exposing deep-seated disagreements over the EU’s cryptocurrency strategy.
The ECB’s primary concern centres on potential systemic risks, warning that a massive influx of dollar-backed tokens could trigger severe liquidity shortages within European banking circles. This scenario threatens to undermine the EU’s monetary sovereignty and catalyse a significant exodus from European assets.
