Europe wants to turn Digital Euro (CBDC) into a stablecoin
6 hours ago
- #Crypto Regulation
- #CBDC
- #Stablecoins
- Europe had a first-mover advantage with stablecoins but lost it due to restrictive regulations.
- Regulations included no yield, a €200M/day issuance cap, and 60% reserves stuck in weak EU banks.
- Outcome: € stablecoins are $500M vs. USD stablecoins at $265B—a 500x difference.
- Tether exited the EU, and Circle pivoted to USDC, leaving no interest in building on 'broken rails.'
- ECB now wants to tokenize the Digital Euro (CBDC) as a stablecoin, despite earlier MiCA regulations aimed at stopping DeFi.
- Meanwhile, the US passed the GENIUS Act, UAE licensed AED stablecoins, and Hong Kong opened HKD/CNH rails for cross-border trade.
- US, UAE, and Hong Kong offer clear rules, fast-track licenses, and composable rails, while the EU is stuck in legal debates.
- MiCA has killed stablecoin liquidity in the EU, and the ECB is scrambling with 'Plan C.'
- Advice: Build where capital flows—US and UAE are forming a new axis of crypto liquidity.