- The ECB rejected proposals to ease liquidity rules and boost euro stablecoins, saying they are too risky.
- The ECB says stablecoins would destabilize bank deposits and weaken its ability to control interest rates.
- This raises digital dollarisation concerns and EU’s competitiveness in the global stablecoin market.
On May 22, 2026, the European Central Bank (ECB) rejected proposals from the Bruegel think tank to ease liquidity rules, grant stablecoin issuers access to ECB funding, and designate the ECB as lender of last resort for them.
ECB President Christine Lagarde and other officials cited risks including bank deposit flight, higher funding costs, reduced lending capacity, and potential runs on reserves that could undermine monetary policy.
ECB Rejects Proposals to Ease Liquidity Rules
According to sources, the ECB has rejected proposals set out in a paper by the Brussels-based think tank Bruegel, prepared by Lucrezia Reichlin, Bo Sangers, and Jeromin Zettelmeyer, and presented to European (EU) finance ministers at an informal meeting in Nicosia, Cyprus. The proposals aimed to ease rules and provide support for euro stablecoin issuers, but were dismissed as too risky for financial stability and monetary policy.
Instead of supporting private euro stablecoins, the ECB has reiterated its preference for tokenised commercial bank deposits, which Lagarde has said would combine “traditional account safety with the speed and programmability of distributed-ledger technology.” The rejection comes as the EU reviews its Markets in Crypto-Assets Regulation (MiCAR) and amid the ECB’s ongoing work on a digital euro, which it aims to launch in 2029.
Related: ECB Sets Conditions for Tokenization in Europe’s Capital Markets
Why the ECB Rejected Euro Stablecoin Proposals
ECB President Christine Lagarde and other senior central bankers argued that wider adoption of euro stablecoins would shift customer funds from commercial banks to stablecoin issuers. This would make bank deposits “more fickle” and turn them into a less stable source of funding for banks. The ECB warned that this shift could accelerate disintermediation, raise banks’ funding costs, and reduce their capacity to lend to the economy.
Furthermore, officials expressed concerns that these changes would weaken the banking sector overall and make it harder for the central bank to control interest rates. Several central bankers specifically questioned the idea of extending the lender-of-last-resort function, currently reserved for the regulated banking sector.
What’s Next for Euro Stablecoins and EU Crypto Policy?
The ECB’s decisive rejection of Bruegel’s proposals to ease liquidity rules and grant stablecoin issuers central bank access signals a continued stringent regulatory stance. As MiCA undergoes review, meaningful easing is unlikely and Euro stablecoin growth will likely remain constrained in 2026–2027.
Meanwhile, strict EU rules make euro-denominated stablecoins to remain marginal with just 0.3% of global supply within the over $323B market, while USD-pegged stablecoins account for over 99.7% of total supply. Despite initiatives like Qivalis, backed by 37 banks across 15 countries targeting a 2026 launch, and Societe Generale efforts, growth remains constrained and gradual.
Therefore, as the ECB prioritizes safeguards against bank deposit outflows and redemption risks, U.S. momentum under the 2025 GENIUS Act strengthens dollar stablecoin dominance and intensifies concerns over digital dollarisation across euro-area payments.
Related: MiCA Report: Euro Stablecoins Safer but Less Competitive
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