European Commission to ease rules on foreign stablecoins despite ECB opposition

The European Union is preparing to relax its stance on foreign-issued stablecoins, potentially allowing U.S. dollar-backed tokens like USDC and USDT to circulate freely within the bloc, the Financial Times reported on June 25.

According to the report, the European Commission will soon issue formal guidance enabling stablecoins issued outside the EU to be treated as equivalent to their European-registered counterparts.

The move would clear a key regulatory hurdle that has so far limited the reach of dollar-backed stablecoins in Europe’s financial markets.

The shift comes despite repeated warnings from the European Central Bank, which has cautioned that unrestricted access to foreign stablecoins could undermine financial stability.

ECB President Christine Lagarde previously urged policymakers to tighten restrictions on stablecoin issuers, citing the risk of capital flight and reduced monetary sovereignty.

Under the EU’s Markets in Crypto-Assets (MiCA) regulation, stablecoin issuers are currently required to maintain most of their reserves in EU-based banks and ensure euro-denominated redemption rights.

The proposed changes would allow global issuers to bypass those limitations for branded versions of their tokens already operating under EU supervision.

The U.S. Senate’s recent passage of the GENIUS Act, which establishes a national framework for stablecoin oversight, has increased pressure on other jurisdictions to keep pace.

The Financial Times cited several unnamed officials familiar with the matter, who indicated that the Commission’s guidance aims to avoid a scenario in which the EU becomes a “flyover zone” for digital assets, left behind by faster-moving markets in the U.S. and Asia.

The ECB has not publicly commented on the upcoming guidance, but sources told the FT that internal opposition remains strong. EU officials are reportedly working on a compromise that would give national regulators more discretion in assessing the risks associated with foreign stablecoins.

If enacted, the new approach could mark a turning point for the role of U.S. dollar-backed stablecoins in Europe, reinforcing the dollar’s dominance in digital asset markets while signaling the EU’s desire to remain a competitive hub for crypto innovation.

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