Primož Dolenc: Opening Address - "Stablecoins and Their Impact on Financial Stability"

Why It Matters

The surge in dollar‑denominated stablecoins could erode euro monetary sovereignty and create new systemic‑risk channels, prompting central banks to develop sovereign digital alternatives and tokenised settlement infrastructure.

Key Takeaways

• Stablecoin market caps ~315 bn USD, dominated by US dollar.
• EU's MiCAR regulates euro‑denominated stablecoins, but market stays dollar‑centric.
• Slovenia pioneered DLT government bonds, showcasing digital capital markets.
• Eurosystem projects PONTES and APPIA aim tokenised central bank money.
• Digital euro proposed to preserve monetary sovereignty amid tokenisation.

Pulse Analysis

Stablecoins have exploded from roughly $170 bn at the end of 2023 to nearly $315 bn today, with the vast majority issued in US dollars. This concentration gives the United States a de‑facto foothold in the emerging tokenised economy, raising concerns about monetary sovereignty for the euro area. While Europe’s Markets in Crypto‑Assets Regulation (MiCAR) sets rigorous reserve and transparency standards for euro‑denominated stablecoins, market participants continue to gravitate toward dollar‑backed alternatives, creating a regulatory asymmetry that could amplify systemic risk if left unchecked.

In response, the Eurosystem is accelerating its digital‑currency agenda. The digital euro is positioned as a public‑money anchor that can coexist with private stablecoins while ensuring that settlement remains under central‑bank control. Pilot projects such as PONTES, which links distributed‑ledger platforms to the existing TARGET2 system, provide a short‑term bridge for tokenised payments. The longer‑term APPIA initiative explores issuing tokenised central‑bank reserves, promising near‑instant, secure settlement for securities, cross‑border transfers, and large‑value transactions. These efforts aim to preserve the unity of money—making a euro in any form interchangeable without friction.

The broader implication is a shift in how financial stability is monitored and managed. By embedding central‑bank money into tokenised infrastructures, regulators can gain real‑time visibility into transaction flows, reducing the opacity that currently characterises many DeFi activities. Slovenia’s 2024 DLT‑based sovereign bond issuance demonstrated practical feasibility and signaled Europe’s readiness to lead in digital capital markets. As stablecoins continue to reshape payment ecosystems, the development of sovereign digital assets and tokenised settlement layers will be pivotal in safeguarding monetary policy autonomy and mitigating new contagion pathways.