Monetary Policy

Policy Brief
EN
10.06.25

Cryptomercantilism: How US Stablecoins Threaten Europe’s Monetary Sovereignty

Can Europe safeguard its monetary autonomy as dollar-backed stablecoins expand globally?

Executive Summary

The dollar’s next expansion wave is happening on the blockchain. In “Cryptomercantilism vs. Monetary Sovereignty: Dealing with the Challenge of US Stablecoins for the EU”, we show how Washington’s support for privately issued, dollar-pegged stablecoins extends US influence by linking them to Treasury markets. This “cryptomercantilism” deepens digital dollarisation worldwide and exposes other economies to external shocks.

Europe’s defences are strong, but not sufficient. The EU’s 2024 Markets in Crypto-Assets Regulation (MiCAR) restricts non-euro stablecoins and empowers regulators to cap issuance under ECB oversight. Together with the forthcoming digital euro, these measures safeguard Europe’s financial stability and monetary sovereignty inside the Single Market.

Global dollarisation remains a systemic threat. Even if Europe ring-fences its domestic market, widespread uptake of USD-pegged tokens in third countries could reinforce dollar dominance and marginalise the euro in digital finance. Stablecoins are poised to become an instrument of monetary dependence in countries with fragile currencies and limited access to banking.

Europe must pair regulation with strategy. We argue that the EU should not relax MiCAR to chase competition but instead double down on robust enforcement while strengthening its multilateral presence. Promoting euro-denominated settlement in cross-border payment systems and ensuring CBDC interoperability are essential to preserving monetary autonomy in a digitalised world.

This study was prepared for the European Parliament’s ECON Committee. The paper was commissioned by the Economic Governance and EMU Scrutiny Unit ahead of the Monetary Dialogue with the ECB President on 23 June 2025. It informs parliamentary debate on how Europe should safeguard monetary sovereignty in the era of digital currencies.

Policy recommendations

  1. Enforce MiCAR rigorously, with active ECB oversight of all foreign-currency stablecoin issuance.

  2. Accelerate the rollout of the digital euro as the default on-chain money for EU households.

  3. Support cross-border CBDC interoperability to reduce reliance on USD-dominated infrastructures..

  4. Expand the euro’s role in trade invoicing and settlement to counter global digital dollarisation.