ECB Considers Issuing Tokenized Euros to Challenge Stablecoins
The European Central Bank (ECB) is exploring the possibility of issuing euros directly on a blockchain, as outlined by Executive Board member Isabel Schnabel at the Jackson Hole symposium. The initiative aims to provide secure settlement options for tokenized markets and reduce reliance on private stablecoins during financial stress. Schnabel emphasized that while stablecoins can be safe under normal conditions, they lack the ability of central banks to expand liquidity in a crisis. The ECB's new project, Pontes, is set to launch next month, linking traditional settlement systems with blockchain platforms. It will initially maintain cash finality within TARGET2 but plans for smart contracts and 24/7 operations are under consideration. Schnabel favors direct token issuance by the ECB over private sector alternatives. The initiative reflects growing concerns about stablecoin dominance in Europe's financial infrastructure, particularly as dollar-pegged tokens far outpace euro-backed ones.
Topics: blockchain digital euro ECB stablecoins