EU Clash: ECB and European Commission at Odds Over Dollar-Pegged Stablecoins

As Politico reports, the European Central Bank is sounding the alarm—demanding an immediate overhaul of MiCA amid fears that American crypto policies could spill into the EU, unleashing what it calls “financial contamination” and sparking a potential exodus of capital.

Brussels, however, remains unshaken. The European Commission has rejected the ECB’s assessment as “overstated,” insisting that existing MiCA provisions provide adequate oversight of dollar-backed stablecoin issuance in European jurisdictions.

ECB Flags Risks from U.S. Crypto Push, Commission Defends MiCA

An internal ECB memo issued in early April 2025 raised concerns about recent U.S. legislation favoring the crypto sector. The bank warned that a wave of dollar-backed stablecoins could pose systemic risks to EU financial institutions.

In response, the European Commission reaffirmed confidence in MiCA, which came into effect four months ago. Brussels cited the framework’s limits on foreign stablecoin issuance and strict reserve obligations as sufficient for safeguarding the EU market.

The Rising Threat of Dollar-Pegged Stablecoins

The STABLE and GENIUS bills, currently under review in the U.S., aim to expand regulatory clarity for dollar-pegged stablecoin issuers. Standard Chartered predicts the value of these assets could skyrocket to $2 trillion within three years—up from today’s $230 billion benchmark.

Check this out: House Committee Advances Stablecoin Regulation Bill Amid Crypto Debate

The European Central Bank has cautioned that, in the absence of tighter controls, eurozone-based stablecoin issuers may come under simultaneous redemption pressure from both EU and non-EU investors—posing a risk of rapid liquidity outflows.Mikko Ohtamaa, CEO and co-founder of Trading Strategy, commented on the issue in a post on X:

The worry is warranted. However, the EU had the first mover advantage with the regulation and they screwed it up. No EU stablecoin is internationally competitive because the inherited business unfriendliness that was baked into the MiCA by the lobbying efforts of banks and other legacy financial institutions.

Stablecoin capitalization has reached $234 billion—but regulatory friction is growing. Tether’s USDT has been removed from multiple leading exchanges after falling short of MiCA compliance.

Related: Stablecoin Market Cap Surpasses $230B Following Trump’s Endorsement

MiCA Reforms Could Shape Digital Euro Rollout, Says ECB

For the ECB, the push to tighten MiCA is more than a technical correction—it’s a statement of intent, woven into the fabric of its vision for a digital euro. Piero Cipollone, the executive in charge of digital payments, insists that stricter rules on stablecoins will be crucial for building user confidence in the EU’s evolving financial oversight.

Brussels, however, strikes a more measured tone. The European Commission stresses that any revision to MiCA must follow an in-depth analysis of market effects. A full round of consultations with industry players and EU Member States is set to run until year’s end, with an eye toward protecting fiscal integrity and systemic stability.

Read on: Europeans Are Reluctant to Adopt the Digital Euro