An adviser to the European Central Bank (ECB) has expressed skepticism that a central bank digital currency (CBDC) alone can effectively challenge the growth of US dollar-pegged stablecoins. In a recent blog post, Jürgen Schaaf proposed several strategic measures for the European Union to counteract the rise of stablecoins linked to the US dollar, emphasizing the need for regulated euro-pegged stablecoins and enhanced global coordination on stablecoin regulation. He suggested that while the digital euro is a vital component, the primary response should focus on euro-denominated stablecoins, which could meet market demands and strengthen the euro's international standing. Schaaf indicated that the digital euro acts as one pillar in a broader digital payments strategy, alongside private innovations and DLT applications. The ECB is set to progress towards a decision on the digital euro by the end of 2025, reflecting a comprehensive approach to maintaining European monetary sovereignty against increasing US dominance in digital finance.

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