- ECB board member Isabel Schnabel warned that stablecoins could threaten financial stability.
- Dollar-backed stablecoins may further strengthen global U.S. dollar dominance.
- The ECB sees the digital euro as a key tool for preserving monetary sovereignty.
- Coinbase is urging regulators to adjust MiCA rules to improve Europe's crypto competitiveness.
ECB Warns of Stablecoin Risks
European Central Bank board member Isabel Schnabel has renewed calls for the digital euro, arguing that the rapid growth of stablecoins presents risks to financial stability, monetary policy, and the broader international monetary system. Speaking at the 2026 Bank of Korea International Conference in Seoul, Schnabel said stablecoins remain vulnerable to liquidity mismatches and sudden losses of confidence in reserve assets, creating the potential for run-like events.
The ECB official noted that the global stablecoin market has expanded to nearly $300 billion, with Tether's USDT and Circle's USDC accounting for roughly 90% of total market capitalization. While growth has moderated recently, Schnabel believes stablecoins have become systemically important enough to warrant increased attention from central banks and regulators.
Dollar Dominance Remains a Concern
A major concern for the ECB is the overwhelming dominance of dollar-backed stablecoins. Schnabel warned that widespread adoption of these assets could further reinforce the dollar's position in the global financial system and increase the influence of U.S. monetary policy across international markets.
According to Schnabel, euro-denominated stablecoins remain a relatively small segment of the market, limiting Europe's ability to compete in the emerging digital payments landscape. She argued that policymakers must act to ensure the euro maintains relevance in a future increasingly shaped by tokenized money and digital assets.
Digital Euro and MiCA Review Gain Attention
Rather than resisting innovation, Schnabel said central banks should create safeguards that preserve trust while supporting technological progress. She described the digital euro as an essential component of Europe's future payments infrastructure, capable of reducing reliance on foreign payment providers and creating a unified European payment solution.
Meanwhile, Coinbase called for targeted changes to the European Union's Markets in Crypto-Assets framework. The exchange urged regulators to make euro stablecoins more viable, improve access to decentralized finance, preserve global liquidity, and take a more ambitious approach to tokenization. Coinbase also criticized current reserve requirements for stablecoin issuers, arguing that allowing greater use of high-quality sovereign assets could improve resilience without sacrificing safety.
