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<p>Europe does not want to let the stablecoin become the Trojan horse of the dollar in its digital payments. Christine Lagarde brought this issue back to the center of the debate, warning that the dominance of Tether and Circle could weaken European monetary sovereignty. The ECB does not reject the technology. It mainly refuses to import a model designed elsewhere.</p>
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  <h2 class="in-brief--title" id="in-brief">In brief</h2>
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   <li>Lagarde warns about the risk of digital dollarization driven by stablecoins.</li>
   <li>The ECB does not reject blockchain technology but refuses a model dominated by foreign private issuers.</li>
   <li>Europe wants to build a tokenized monetary infrastructure around central bank money.</li>
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<h2 id="h-la-bce-voit-le-risque-avant-le-confort">The ECB sees the risk before the comfort</h2>
<p>Europe must not copy the American stablecoin model. This warning echoes a concern already visible, where the ECB feared <a href="https://www.cointribune.com/en/stablecoins-the-ecb-fears-losing-control-over-the-euro/" rel="noopener noreferrer nofollow">a loss of control over the euro against stablecoins</a>. The market now exceeds 300 billion dollars, but it remains dominated by tokens denominated in dollars.</p>
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<p>This figure changes the nature of the debate. The stablecoin is no longer just a practical tool for crypto traders. It becomes a layer for payment, savings, and settlement. When this layer relies on the dollar, Europe loses part of the digital ground where the currency of tomorrow is played out.</p>
<p>Lagarde therefore does not speak of an abstract danger. She speaks of a habit that can settle in quickly. A merchant, a company, or a platform chooses the stablecoin dollar because it is liquid, known, and available. Then this convenience becomes a norm. That is where digital dollarization begins.</p>
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<h2 id="h-le-stablecoin-en-euro-ne-convainc-pas-lagarde">The euro stablecoin does not convince Lagarde</h2>
<p>The simple response would be to create more stablecoins in euro. Several European actors see this as a natural solution. After all, if the dollar advances on the blockchain, why wouldn’t the euro do the same?</p>
<p><a href="https://www.coindesk.com/business/2026/05/08/ecb-s-lagarde-warns-tether-and-circle-stablecoins-risk-digital-dollarisation-in-europe" rel="noopener noreferrer nofollow">Lagarde considers this response too short</a>. According to her, the case for stablecoins denominated in euro is less solid than it seems. The risk does not come only from the technology. It also comes from trust, reserves, and the ability to maintain parity during times of stress.</p>
<p>The problem is simple. A stablecoin remains a private debt. Its stability depends on the assets that back it. It also depends on user confidence at the worst moment. However, in a crisis, the promise of conversion at parity can become fragile. And this is precisely what central banks refuse to normalize.</p>
<h2 id="h-l-enjeu-depasse-largement-la-crypto">The issue goes far beyond crypto</h2>
<p>The debate does not only pit the ECB against crypto companies. It opposes two visions of digital money. On one side, private currencies able to circulate quickly on the blockchain. On the other, a public infrastructure where central bank money keeps its anchoring role.</p>
<p>Lagarde however recognizes the usefulness of technology. Stablecoins have shown that a fast, programmable, and blockchain-available settlement met a real need. Tokenized finance will need a native settlement asset. On this point, the ECB is not closing the door.</p>
<p>But it wants to separate the tool from the objective. Just because stablecoin popularized settlement on blockchain does not mean it should become the monetary foundation of the system. Besides, Europe is already exploring other avenues, notably with <a href="https://www.cointribune.com/en/france-pushes-europe-to-respond-with-euro-stablecoins/" rel="noopener noreferrer nofollow">euro stablecoins backed by European banks</a>. The question is therefore no longer only technical. It becomes strategic.</p>
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<h2 id="h-l-europe-cherche-son-propre-rail-monetaire">Europe is looking for its own monetary rail</h2>
<p>The ECB wants to build its own rail. It is working on infrastructures capable of linking tokenized finance to the European monetary system. The objective is clear: allow digital settlements without letting the dollar become the default currency of tokenized markets.</p>
<p>This strategy is slower than a simple stablecoin launch. It is also more political. Europe does not only seek to circulate a private digital euro. It wants to avoid tomorrow’s tokenized markets being settled by default in dollars issued by foreign companies.</p>
<p>The real issue is therefore dependence. If Europe misses this transition, it will not only lose a crypto battle. It will let part of its digital finance organize around a currency, rules, and issuers that do not depend on it. That is why the <a href="https://www.cointribune.com/en/digital-euro-the-ecb-prepares-an-unprecedented-plan-to-bypass-visa-and-mastercard/" rel="noopener noreferrer nofollow">digital euro project prepared by the ECB</a> becomes a central piece of the puzzle.</p>

Digital dollar : Lagarde warns against the stablecoin trap

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