BlockBeats News, May 23, the European Central Bank (ECB) rejected the proposal to relax regulation on Euro stablecoins, considering these measures too risky and potentially harmful to financial stability and monetary policy transmission. Bruegel proposed at the EU Finance Ministers' informal meeting in Nicosia, Cyprus, to lower the liquidity requirements for stablecoin issuers and allow them to access ECB funding when necessary to counter the market dominance of the US dollar stablecoins and prevent "digital dollarization." However, officials, including ECB President Lagarde, strongly opposed, arguing that stablecoins would make bank deposits unstable, increase bank funding costs, weaken lending capacity, and disrupt interest rate control.

Despite some finance ministers holding a mixed attitude towards the proposal, several central bank officials questioned the idea of ECB becoming the "lender of last resort" for stablecoin issuers. Currently, the EU is strictly regulating stablecoins under the MiCAR regulation, while the US GENIUS Act passed in 2025 adopts more lenient rules. Currently, Euro stablecoins account for only 0.3% of the global stablecoin supply, while Europe is advancing the Digital Euro project to enhance payment sovereignty.