The European Central Bank opposes easing rules on euro stablecoins, arguing it could weaken bank lending and interest rate control.

According to a Reuters report, the European Central Bank (ECB) opposed a proposal to promote more euro-denominated stablecoins at a meeting of EU finance ministers. The ECB argued that easing liquidity requirements for stablecoin issuers, or even granting them access to ECB funding, could weaken the stability of bank deposits, curb bank lending, and increase the difficulty of interest rate control. The proposal, put forward by Bruegel in meeting documents, aimed to expand the market currently dominated by dollar-denominated stablecoins. ECB President Christine Lagarde has previously also held a cautious stance on euro-denominated stablecoins, preferring tokenized commercial bank deposit schemes. The report also stated that the EU is reviewing the MiCA, which is scheduled to take effect in 2024, while the US plans to pass the more lenient GENIUS Act in 2025.