Call for Collaboration on Euro-Backed Stablecoins
Denis Beau, the deputy governor of the Banque de France, has called for an urgent collaboration among both public and private sectors in Europe to create euro-backed stablecoins. This stance diverges from the more cautious strategy of European Central Bank (ECB) president Christine Lagarde.
Need for Tokenized Euro Money
In a statement made on May 12, Beau emphasized the necessity for a coordinated effort to establish tokenized euro money. This initiative aims to mitigate the prevalence of dollar-pegged stablecoins, which currently dominate the market. According to him, these dollar-linked assets account for an astonishing 98% of the overall stablecoin landscape, posing a significant threat to Europe’s financial sovereignty.
Contrasting Approaches
While Lagarde has championed a sedate approach, advocating for the introduction of a state-backed digital euro projected for launch around 2029, Beau argues that immediate solutions are essential for the economic health of Europe. He calls for the development of euro-denominated alternatives to avert the risks associated with what he refers to as “digital dollarisation”—an over-reliance on dollar-based tokens at the infrastructure level.
Support from European Banks
Beau’s viewpoint has garnered support from Qivalis, a consortium composed of 12 major European banks, including BBVA, ING, UniCredit, and BNP Paribas, who are planning to implement a euro-pegged stablecoin by mid-2026. Additionally, he noted the Eurosystem’s Pontes initiative, which aims to roll out wholesale central bank money in tokenized format before the conclusion of 2026. A preliminary version of this service is set to be available by the end of the current year, illustrating his belief that this initiative serves merely as a cornerstone for broader financial innovation rather than a conclusive answer to the challenges at hand.
Policy Framework Divergence
The divergence between Beau and Lagarde reveals a deeper rift within the policy framework of European financial institutions. Lagarde has consistently expressed concerns about the potential instability posed by privately issued stablecoins, while both Beau and French Finance Minister Roland Lescure advocate for swift private-sector advancements in euro stablecoins as a necessary immediate response. Furthermore, the Bundesbank has indicated its willingness to explore euro-denominated stablecoins to enhance cross-border payment efficiency.
As the timeline for the ECB’s intended retail central bank digital currency (CBDC) contrasts sharply with the pressing demands of dollar stablecoins, there appears to be growing support among European central bankers for private sector initiatives as an urgent alternative.
