The ECB on stablecoins: risks, MiCA regulations, and opportunities for the euro market
On 26 November 2025, within the framework of its Financial Stability Review, the European Central Bank (ECB) published an article of significance to the financial sector entitled “Stablecoins on the rise: still small in the euro area, but spillover risks loom”.
While the document focuses on macroprudential analysis, a close reading yields a fundamental conclusion: the market for crypto-assets has reached a level of maturity that renders it an integral component of the global financial system.
For entities contemplating operations within the European Union, this report- when read in conjunction with the provisions of the Markets in Crypto-Assets Regulation (MiCA)- serves as confirmation of the stabilisation of the business environment surrounding the crypto-asset market.
EMT in light of MiCA- legal stability for tokens that are e-money
The bedrock of security- the deficit of which hindered market development in previous years- is the unprecedented legal framework now established by Regulation (EU) 2023/1114 of the European Parliament and of the Council (MiCA). Title IV of the Regulation, which governs the status of e-money tokens (EMTs), plays a pivotal role in the issue at hand.
Pursuant to the definition set forth in Article 3(1)(7) of MiCA, these are a type of crypto-asset that purports to maintain a stable value by referencing the value of one official currency.
MiCA brings an end to the era of legislative uncertainty by introducing transparent rules for issuers. Under the provisions of Title IV, the issuance of e-money tokens in the Union is restricted to credit institutions and electronic money institutions, thereby eliminating from the market entities that fail to guarantee the security of trading.
Crucially for the fostering of investor confidence, the EU legislator has guaranteed holders of EMTs a permanent right of redemption of the tokens in funds, at any time and at par value. Simultaneously, to prevent regulatory arbitrage vis-à-vis the banking sector, Article 50 of MiCA introduces a prohibition of granting interest in relation to e-money tokens.
These provisions position EMTs as a secure, digital equivalent of cash (a medium of exchange), rather than a speculative instrument.
ECB report on stablecoins: market size, systemic risks, and an opportunity for the euro digital currency
The ECB’s November report provides key quantitative data corroborating the success of the stablecoin model. Their global market capitalisation has reached a historic high of USD 280 billion, currently representing approximately 8% of the entire crypto-asset market.
The ECB explicitly indicates that stablecoins have become “critical for the functioning of the crypto-asset ecosystem,” facilitating approximately 80% of all transactions executed on centralised trading platforms.
The authors of the report identify systemic risks, such as the potential loss of the peg to the referenced asset (so-called de-pegging) resulting from a sudden loss of investor confidence, which may lead to massive redemptions (run risks).
The ECB also draws attention to the risk of transferring tensions to traditional markets (spillover effects), noting that issuers of the largest USD-denominated stablecoins (USDT, USDC) have become significant holders of US Treasury bills, with reserves comparable to the assets of the world’s largest money market funds.
It must be noted, however, that from the perspective of the European FinTech sector, the report reveals a vast market niche. Currently, a substantial portion of the stablecoin market consists of USD-denominated assets, whereas stablecoins denominated in euro account for a mere EUR 395 million in capitalisation.
This implies that the European market- fully regulated and secure by virtue of MiCA requirements- possesses immense, untapped growth potential.
Summary: Stablecoins gain recognition from the ECB, and the euro EMT market opens up new opportunities
The ECB’s November report, while conservative in tone, effectively legitimises stablecoins as a key element of modern financial architecture. The disparity between the USD and EUR markets highlights a significant market niche.
Crypto-asset service providers (CASPs) offering solutions based on regulated EMTs in euro may anticipate capturing a portion of the volume by offering security that unauthorised entities cannot guarantee. Entering this sector at the present juncture, under the legal umbrella of MiCA, constitutes a strategic business decision with high growth potential.
How we can help your company enter the MiCA-compliant EMT market
The ECB report and the MiCA legal framework confirm that stablecoins, especially euro-denominated EMTs, are becoming a pillar of the modern financial system. If you are planning to enter the crypto asset market as an EMT issuer or a CASP, contact us! We will help you build a secure, compliant business model based on e-money tokens.
