Below are guest posts and opinions from Eneko Knörr, CEO and co-founder of Stabolut.
A few months ago, in the operation of cryptoslates, I warned that MICA, the EU flagship crypto regulations, would meet the opposite of the target. I argued that it would strangle the euro innovation, while solidifying its control of the US dollar for a new generation.
At the time, some thought this was a vigilator. Today, rigorous verifications have reflected the same concerns from the European Central Bank itself. In a recent blog post highlighted by the Financial Times, ECB advisor Jürgen Schaaf described the state of the euro-religious Stablecoin market as “brothel,” warning that Europe is at risk as “steam-carrying” by dollar-based competitors.
This warning occurs at a critical time. In the traditional global economy, non-USD currency is the lifeblood of commerce. They account for 73% of global GDP, 53% of Swift transactions, and 42% of central bank reserves. However, in the fast-growing digital economy, these same currencies are barely visible. The euro, the world’s second most important currency, has been reduced to digital rounding errors.
By numbers: digital cracks
The data reveals a surprising disconnect. According to data from Coingecko, individually issued Stablecoins have been issued personally, but ordered a market capitalization of nearly $300 billion, and euro religious counterparts are struggling to reach $450 million. It’s just 0.15% market share.
This is not a gap. It’s a crack. This means that for every euro that is traded on the blockchain, there is nearly 700 euros in the US dollar. This dollarization of the digital world poses a deep strategic risk to Europe’s financial sovereignty and economic competitiveness.
Mica’s 1 billion euro handbrake
The EU’s groundbreaking market in Crypto-Assets (MICA) regulations aimed at generating clarity, but in its ambition to control risk, it accidentally built a cage. The electronic money token (EMTS) framework provides a path to regulation, but includes the euro-stable toxins with global ambitions.
The only biggest limit is the 200 million euro cap for daily EMT transactions deemed “important” as detailed in the official MICA text. This is not an accident or simple surveillance. This is a feature designed to prevent private euro stub coins from really succeeding.
In the context, the major dollar Stablecoin, Tether (USDT), regularly processes volumes of over $50 billion each day. The 200 million euro cap is not a safety measure. This is a non-American declaration that makes it mathematically impossible for euro stables to function on the scale necessary for international trade or distributed finances.
The motivation seems clear. Policymakers are deliberately hindering the private sector to clear their project, the digital euro area.
Digital Euro: A threat to citizen privacy?
By curbing private innovation, the EU places all its bets on the state-controlled central bank digital currency (CBDC). This is not only a slow, focused answer to a fast-moving, decentralized market, but also poses a fundamental threat to the privacy of European citizens.
Physical cash provides anonymity. A transaction with a 5 euro memo is private, peer-to-peer and leaves no data trails. CBDC is against it. Move all transactions to a centralized digital ledger and create a system of granular surveillance. It gives the nation the potential to monitor, track and even control how all citizens use their money. Building the future of the euro in this foundation means exchanging the freedom of transparent digital piggy bank wallets.
Global Race Europe ignores
While Brussels focuses on building walled gardens, other major economic forces recognize the strategic importance of privately issued stubcoins. They view them as not a threat, but as an important tool for projecting financial impact into the digital age.
Even China is reportedly investigating the role that CNY-backed Stablecoin can play in its original internationalization. In Japan, regulators have already passed the landmark Stablecoin bill, creating a clear pathway for the issuance of stablecoins supported by the yen. These countries understand that digital currency wars will win by empowering civilian innovation rather than centralizing control. The current path in Europe will become spectators in the races it should lead.
Euro Policy Playbook
If the Euro competes, Brussels will need to perform a radical policy U-turn. The goal is not to contain stubcoins, but to make it the best global hub for issuing the EU. This requires a clear eye strategy that recognizes that private innovation always outweighs centralized solutions.
Here is a playbook for how Europe wins:
- Unlock the Future: Remove the 200 million euro transaction cap completely. The market, not the regulator, must determine the size of successful projects. Euro stubcoins grow the infinites of advertising and compete on a global stage without artificial ceilings.
- Fast Track License: Establish a pan-European rapid truck certification process for qualified EMT publishers to circulate from the market to encourage a vibrant and competitive ecosystem.
- Follow the US Model – CANCEL CBDC: The US has achieved benefits by prioritizing the clarity of private issuers’ regulations while effectively shelving its own retail CBDC plans. Europe must do the same thing. We recognize that the only best strategy to formally cancel the Digital Euro project, acknowledge the fundamental privacy risks it raises, and increase the international influence of the Euro is to fully support the thriving and privately issued stubcoin market.
The choice is strict. Europe can go on a voluntary digital unrelated path. Or, you can unleash innovators and build a financial future. Now, that future is almost entirely built on American digital dollars, and there is no time to change it.
