Dollar-pegged stablecoins circulate roughly $304 billion, DefiLlama data shows, against under $1 billion in euro-pegged tokens. That ratio, more than 300 to 1, framed Isabel Schnabel's case at Jackson Hole on Friday: the European Central Bank wants to issue euros directly onto a blockchain, and its executive board member was unambiguous about what that means for stablecoins in European settlement.
The settlement stakes
The policy concern is concrete. If private dollar-denominated tokens capture wholesale settlement in tokenized markets, European transactions settle in dollars. Schnabel accepts that a stablecoin can be engineered to near-perfect safety. Her objection is structural. In a panic, demand for cash spikes and a central bank can expand supply; a stablecoin issuer cannot. She reached back to the banking panic of 1907, when money was tied to banks' government-bond holdings and the supply could not flex, as the precedent the Federal Reserve Act of 1913 was written to close.
"Stablecoins are best understood as complements to central bank money, not substitutes for it," she said.
| Metric | Value | Source |
|---|---|---|
| Dollar-pegged stablecoin supply | ~$304 billion | DefiLlama |
| Euro-pegged token supply | Under $1 billion | DefiLlama |
She weighed three routes: direct issuance of tokenized central bank money, bridging from today's systems, or letting a private firm tokenize reserves through an omnibus account. She wants the first. The other two leave the ECB watching from outside the code, unable to run repo operations on-chain when the market needs them.
Infrastructure already moving
Pontes, the project linking TARGET Services (the eurozone's settlement backbone) to market blockchain platforms, goes live next month, following a six-month pilot that ran from May to November 2024. That pilot put 64 institutions across nine jurisdictions through 58 use cases; they settled nearly €1.6 billion in central bank money. Cash finality stays within TARGET2 initially, with smart contracts and around-the-clock settlement coming later.
A parallel project, Appia, is still deciding whether Europe needs one shared ledger or several. Schnabel cited France's Lise, holder of Europe's first tokenized exchange license, as evidence that tokenization can open markets to smaller firms.
Other central bankers have voiced similar warnings about stablecoins. Crypto only appeared on the Federal Reserve's Jackson Hole agenda for the first time this year.