The European Union (EU) is preparing to permit dollar-backed stablecoins to enter its markets, countering resistance from the European Central Bank (ECB). This shift is attributed to the anticipated passage of stablecoin legislation in the United States, particularly the recently approved GENIUS Act. As a result, stablecoins issued globally will soon be treated as interchangeable with those specifically designed for Europe, according to a Moody's analyst. This change could significantly increase the volume of USD stablecoin transactions within the EU, challenging the previous restrictions imposed by the ECB aimed at limiting such currencies. Analysts have warned that failing to adapt could lead to the EU becoming a 'flyover zone' for crypto compared to more progressive markets in the U.S. and Asia. They argue that the EU must align its regulations with global trends to remain competitive and prevent foreign stablecoins from dominating the digital asset landscape within Europe.

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