US Stablecoins: The EU’s Financial Nightmare or Just Another Tuesday?

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On March 10, 2025, European Stability Mechanism managing director Pierre Gramegna took a moment from his busy schedule of sipping espresso and contemplating the meaning of life to express his concerns about the U.S. government’s love affair with crypto. Apparently, those dollar-denominated stablecoins are giving him more anxiety than a cat in a room full of rocking chairs. 😼

Gramegna’s latest musings about the U.S. crypto policy’s potential impact on the eurozone economy are reminiscent of the Facebook Libra/Diem saga. You know, the one where Facebook tried to launch its crypto and ended up in more legal disputes than a reality TV star? Yeah, that one. 📉

During a Eurogroup press conference, Gramegna warned that tech giants might try to launch their own cryptocurrencies, just like Facebook did between 2019 and 2022. With the current U.S. administration waving the crypto flag like it’s the Fourth of July, we might see another attempt at a Libra/Diem 2.0. 🎆

Reuters quotes Gramegna saying:

“The U.S. administration’s stance on this compared to the past has changed: they’re now all about cryptocurrencies and especially dollar-denominated stablecoins. This could raise some eyebrows in Europe, as it might reignite the plans of foreign and U.S. tech giants to launch mass payment solutions based on those pesky dollar-denominated stablecoins.”

Is the threat real?

According to Gramegna, a payment system launched by social media platforms with millions (or billions) of users could seriously shake up the EU’s financial stability and sovereignty. I mean, who wouldn’t want to pay for their morning croissant with a Facebook coin? 🥐

As of November 2024, Facebook had about 260 million daily users. Fast forward to March 2025, and the EU population is over 744 million. That means nearly 35% of the EU is scrolling through Facebook daily. And let’s not even get started on Instagram! 📱

So, the thought of giving these folks a way to make instant cross-border payments via a U.S.-registered company might seem a tad destabilizing. If Europeans start using social media for payments instead of their bank cards, we could see a significant liquidity drain from euros to the U.S. economy. And let’s face it, any tech giant’s payment system raises centralization concerns that could make even the most secure vaults shudder. 😱

Do these projects pose an existential threat to the eurozone? Theoretically, yes. Practically, European countries could block these payment systems like they did with Facebook’s Libra. Remember that? Good times. 🛑

Back in 2019, European officials were all about blocking Facebook’s Libra to protect their financial sovereignty. BBC quoted then-French finance minister Bruno Le Maire saying that Libra “represents a systemic risk from the moment you have two billion users.” He warned that any hiccups in Libra’s system could lead to chaos. He concluded, “Concerns about Libra are serious. We cannot authorize the development of Libra on European soil.” Sounds like a party pooper, right? 🎉

The U.S. might be ready to back the “next Libra,” but will it be able to bulldoze through the EU’s legal barriers? Even if the EU successfully blocks these initiatives, the U.S. could still expand its influence elsewhere, leaving Europe in the dust. 🚀

Potential solution

The main solution to counter the American stablecoin invasion? European CBDCs! The European Central Bank has been working on the digital euro project since 2020. Gramegna is all about associating European autonomy with the digital euro, calling it “more necessary today than ever.” Talk about a dramatic entrance! 🎭

Gramegna even suggested re-evaluating the MiCA directive, which could be key to countering some of the effects we’ve discussed. In Europe, CBDCs are expected to replace systems like Visa and PayPal, moving away from U.S. influence. Sounds like a plan! 💪

Europe could have jumped on the euro-denominated stablecoin bandwagon, but the current stats are about as promising as a rainy day picnic. Tether’s USDT and Coinbase’s USDC are dominating the stablecoin scene, while euro-pegged stablecoins are lagging behind like a tortoise in a race. 🐢

According to Coinmarketcap, the top 11 stablecoins are pegged to the

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2025-03-12 19:10