Denis Beau, Deputy Governor of the French central bank, has called for an acceleration of tokenized money initiatives in Europe and urged both public and private sectors to take comprehensive action. His remarks sharply contrast with those of European Central Bank (ECB) President Christine Lagarde, who recently downplayed the necessity of euro-based stablecoins.
Stablecoin risks and dollarization concerns
In her latest assessments, Lagarde highlighted the growing $310 billion stablecoin market dominated by USD-pegged coins such as Tether and USDC. She warned that this rapidly expanding market could increase new vulnerabilities in the financial system, leading to a potential loss of control. Lagarde also suggested that the current support for euro-denominated digital assets remains weak.
However, Beau told CoinDesk that private-sector participation in digital euro solutions is essential for Europe’s long-term economic development. He emphasised that broad collaboration, not just central bank mandates, would be necessary to succeed.
These differing perspectives have reignited worries about “digital dollarization” in Europe. Experts forecast the stablecoin market could grow to several trillion dollars; without more euro-based options, European capital may shift toward USD-backed assets, reducing the euro’s international influence and the region’s monetary policy autonomy.
Digital currency projects in Europe
Beau argued that the foundation of Europe’s future tokenized finance should be built upon the euro as the core of payment and settlement systems and layered on the existing two-tier money system.
He proposed a “triple objective” for Europe: adapting central bank services, developing tokenized private money issued by licensed financial institutions, and further strengthening the MiCA regulatory framework.
Beau underscored the need for public and private sector cooperation, suggesting that without joint action, the euro could lose its standing as a leading currency for global fund transfers: “The public and private sectors should act in a complementary way so the euro can maintain its reliability in the tokenized world.”
This viewpoint mirrors the approach of the Qivalis consortium, which brings together twelve leading European banks including ING, BBVA, and BNP Paribas. Qivalis is preparing to launch a private sector-backed digital euro later this year. CEO Jan-Oliver Sell has also warned that without euro-based digital assets, Europe risks losing its digital and financial sovereignty.
Central bank preparations and future plans
Lagarde, meanwhile, stated that a central bank-issued digital euro could offer a safer alternative to USD-based tokens and help address financial stability risks. She remains cautious about privately issued token solutions, setting 2029 as the target year for a centrally managed digital euro.
On the other hand, Beau disclosed that the ECB has already begun piloting token-based payment and settlement systems, with initial concrete results expected by the end of the year. Projects like Pontes are expected to play a key role in these developments.
Given that nearly 98% of the European stablecoin market is currently pegged to the US dollar, the contrasting visions of Lagarde and Beau could be pivotal in shaping Europe’s future financial policy.
