Digital Dollarisation: Europe's Choice Between the ECB's Central Bank Money Vision and a Private Euro Stablecoin Response
28 May 2026
Taken from the published LinkedIn Pulse article.
As USD-denominated stablecoins dominate 98% of the estimated $310B stablecoin market, European Central Bank (ECB) President Christine Lagarde has warned of threats to Europe’s monetary sovereignty. At the same time, a major banking consortium has launched Qivalis to issue a euro-pegged stablecoin. The question remains what this means for Europe’s financial future, as the public debate increasingly divides between public infrastructure and the issuance of a digital euro by 2029, versus private innovation.
The primary concern outlined by Lagarde in her speech at the Bank of Spain’s LatAm Economic Forum was ‘digital dollarisation’, namely the growing use of USD stablecoins by Euro-area entities for trading, payments, DeFi, and cross-border transactions. According to Lagarde, key risks include financial stability, the lack of ‘unconditional finality’ like central bank money, yield-bearing stablecoins indirectly tying holders to US Treasuries, and geopolitical vulnerability. Broader impacts include a weakened ECB monetary policy transmission, fragmented tokenised markets, and compressed euro yields if euro stablecoins compete. Rather than allowing sweeping U.S. dominance in stablecoins, Lagarde has recommended building a tokenised settlement infrastructure anchored in central bank money, with a 2029 rollout target.
However, the private sector is pushing plans for a euro stablecoin. Qivalis, a consortium of 12 major EU banks that has now expanded to 37 members, including ING, BBVA, BNP Paribas, and UniCredit, aims to obtain an electronic money license from the Dutch Central Bank in Q2 2026. CEO Jan-Oliver Sell has professed the need for a ‘Made in Europe’ solution to protect digital sovereignty and reduce non-EU dependence, as the only alternative that currently exists is the U.S. dollar. The plan is for the digital euro to begin on Ethereum for DeFi and trading, and then eventually expand to multichain platforms and usage for wider payments and tokenisation. Qivalis is currently in dialogue with regulators, including the European Commission and the European Parliament. Contrary to the ECB, it is evident that major European banks view current macroeconomic conditions as favourable and the issuance of a private euro stablecoin as a complementary and necessary response to the current financial climate.
The potential consequences of a euro stablecoin are multifaceted and nuanced. On the one hand, a euro stablecoin would strengthen the euro internationally, foster on-chain liquidity, encourage innovation in payments and tokenisation, and accelerate institutional adoption. On the other hand, introducing a euro stablecoin would face significant regulatory hurdles, including compliance with MiCA, competition with the digital euro, and stability risks. As digital asset specialists who support institutions with stablecoin integration and blockchain strategy, Appold believes a hybrid approach that combines public anchors and private innovation would drive the most expansion and growth in the industry, as tokenisation of real-world assets and DeFi scaling require reliable euro on-chain liquidity.
As discussions in both the public and private sectors progress, it will be crucial to monitor the situation while Europe navigates this crossroads. The choice between copying the U.S. model of privately led stablecoins or leading with sovereign infrastructure will prove fundamental in shaping the future of decentralised finance in Europe.
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