The Bank of France Sounds the Alarm on Dollar Stablecoins: “Stablecoinisation” Is Already Here

Key Highlights:

• The Number That Keeps Beau Up at Night: 99% of stablecoins in circulation are dollar-denominated. Euro stablecoins hold just 0.35% of a $300B+ market.
• The Warning: First Deputy Governor Denis Beau warns of "stablecoinisation" and "dollarisation" of the EU payment system—already happening, faster than regulation can contain it.
• Europe's Response: Nine European banks (ING, UniCredit, CaixaBank) are launching a joint euro stablecoin by late 2026. France's wholesale tokenised central bank money goes live before year end.
• What Beau Wants Changed: MiCA restrictions on non-euro stablecoin use in everyday payments, tighter controls on multi-jurisdictional issuance, and bank-affiliated issuers preferred over non-banks.
• The US vs. EU Divergence: The GENIUS Act (US) embraces stablecoins to reinforce dollar dominance. MiCA (EU) prioritises consumer protection and bans yield. Two philosophies, one global market.

First Deputy Governor of the Bank of France recently laid out Europe's stablecoin problem in a single number: 99% of stablecoins in circulation are dollar-denominated. Euro alternatives account for just 0.35% of a market that has already crossed $300 billion.

It is against that backdrop that Denis Beau used last month's EUROFI High Level Seminar in Nicosia to lay out what he thinks Europe needs to do—and how much ground it still has to cover.

The Warning: "Stablecoinisation" Is Already Here

His remarks were direct: if dollar-backed stablecoins continue embedding themselves into European payment infrastructure, the result will be what he called "stablecoinisation" and "dollarisation" of a significant part of the EU's payment system, with real consequences for financial stability and strategic autonomy.

This is not a distant risk. The integration of dollar stablecoins into settlement rails—including wholesale transactions and cross-border corporate cash management—is already happening, and faster than the regulatory infrastructure designed to contain it.

Europe's Response: Public and Private

The Banque de France is not waiting on legislation. Three programmes—Pontes, Appia, and the digital euro—form its contribution to modernising central bank money for the tokenised era. Wholesale tokenised central bank money services are scheduled to go live before the end of this year. The digital euro covers the retail side, but Beau was careful not to present it as a standalone fix—the wholesale layer matters just as much, and so does what the private sector builds alongside it.

Nine European financial institutions including ING, UniCredit, and CaixaBank announced a joint project earlier this year to launch a euro-denominated stablecoin by late 2026. These banks are leaning on MiCA compliance as a selling point, positioning their coins as regulated alternatives to offshore dollar tokens. Beau backed this kind of initiative, noting that cross-border cash management for international companies is precisely where dollar stablecoins have found their strongest foothold—and where a credible euro alternative is most urgently needed.

His broader argument is that tokenised finance must be built on the same two-tier monetary architecture that underpins the current system: central bank money and supervised private money coexisting as substitutes at par. A payment infrastructure that defaults to a foreign-currency stablecoin as its base layer cuts that architecture at the root.

MiCA Was a Start, Not a Solution

The EU was first with comprehensive crypto regulation. MiCA introduced legal certainty for stablecoin issuance and related services, and France's earlier Pacte Law gave its regulators a head start in building the expertise to implement it. In Nicosia, Beau stated that MiCA's current scope may not be keeping pace with market shifts.

He called explicitly for three changes:

• Restrictions on the use of non-euro stablecoins in everyday payments—a step beyond MiCA's existing approach of volume caps on large stablecoins
• Tighter controls on multi-jurisdictional issuance of the same stablecoin, an area where regulatory arbitrage becomes a practical problem when markets come under stress
• Bank-affiliated stablecoin issuers carrying structurally lower counterparty risk than non-bank actors, given their access to central bank liquidity and European prudential supervision

The US Is Pulling in the Opposite Direction

What makes Europe's position harder is that Washington is moving in the opposite direction. The US GENIUS Act, passed in July 2025, created a federal framework for payment stablecoins built around corporate flexibility and the global role of the dollar. Executive orders have explicitly backed stablecoin development while sidelining central bank digital currencies—a direct contrast to the ECB's digital euro project.

The gap between the two regulatory philosophies is significant:

For EU policymakers, that creates a practical problem: a permissive US framework gives multinational firms a credible route to process transactions in dollar stablecoins while sidestepping European rules. Beau's call for full global implementation of FSB standards—"same activities, same risks, same rules"—is a direct response to that dynamic, even if US alignment with those standards looks unlikely in the near term.

The Bottom Line

Stablecoins are becoming infrastructure. Whoever sets the terms for that infrastructure—its currency, its rules, its issuers—holds a durable advantage in how global payments work.

Wholesale tokenised central bank money goes live before the end of 2026. Whether that timeline is fast enough to matter is the only question left. The euro stablecoin from nine European banks arrives around the same time. The Bank of France has sounded the alarm. Now the market waits to see if Europe can answer before dollar stablecoins become the permanent standard.