ECB Officials Warn Stablecoins Could Lead to "Dollarization" of the Eurozone

According to a report by Jinse Finance, the Financial Times has revealed that a senior official at the European Central Bank has warned that the rise of stablecoins pegged to the US dollar could lead to the “dollarization” of the eurozone, thereby weakening the ECB’s control over monetary policy. Jürgen Schaaf, an advisor in the ECB’s Market Infrastructure and Payments division, wrote on the ECB’s official blog that the rapid proliferation of stablecoins could expose the eurozone to issues similar to those faced by emerging economies—namely, “dollarization.” In these emerging markets, the widespread use of the US dollar hampers local policymakers’ ability to set interest rates or control the money supply.