Written by Helena Markou
Europe’s stablecoin problem is often described as a technology gap, but that is too narrow. What Europe is facing is really a monetary positioning problem. Dollar-linked digital cash is moving from crypto-native use cases into institutional finance, reserve management, and on-chain treasury workflows, while Europe is still debating whether there is enough demand to justify a serious euro-denominated response. The result is a dangerous asymmetry. By the time Europe builds the legal confidence and industrial coordination needed for euro stablecoins and tokenized deposits to scale, the dollar may already have become the default reserve instrument of the on-chain financial system.
That is the context for the recent warning from Global Finance. The publication reports that French Finance Minister Roland Lescure has called for more euro-based stablecoins and encouraged banks to explore tokenized deposits, arguing that the limited circulation of euro-pegged tokens compared with dollar-backed alternatives is “not satisfactory.” That is a remarkable admission because it shows European officials now recognize the problem in explicitly competitive terms. This is not only a matter of innovation prestige. It is a question of what denomination dominates the next layer of digital payments and tokenized finance.
The European response is not entirely theoretical. Global Finance says the Qivalis consortium, which includes ING, UniCredit, and BNP Paribas, plans to launch a MiCA-compliant euro-denominated alternative in the second half of 2026, subject to regulatory approval. The same report says Qivalis selected Fireblocks to provide tokenization, wallet, and settlement infrastructure. On paper, this looks like a credible institutional answer: large banks, regulatory alignment, and an identifiable infrastructure partner. But the article also captures the hesitation embedded in the European project. Recent research from RBC Capital Markets, cited there, found that two-thirds of European banks surveyed still see demand for euro-pegged stablecoins as limited.
That single detail may be the most important in the entire debate. Europe does not just lack tokenized euro scale. It lacks confidence that scale will arrive quickly enough to justify aggressive build-out. That creates a self-reinforcing trap. Banks hesitate because user demand looks weak. User demand looks weak because euro-denominated products remain fragmented, under-distributed, and institutionally tentative. Meanwhile, the dollar side of the market grows stronger not merely because the United States moves faster legislatively, but because it already enjoys the default advantages of reserve currency status, deep Treasury markets, and a global base of institutions willing to hold dollar risk.
The contrast with the United States is becoming harder to ignore. In a recent announcement, J.P. Morgan Asset Management said it launched its second tokenized money market fund, JPMorgan OnChain Liquidity–Token Money Market Fund, or JLTXX, on public Ethereum. This is not a speculative crypto token chasing narrative momentum. It is a U.S.-registered government money market fund designed to invest only in Treasuries and overnight repos collateralized by Treasuries and/or cash, while giving qualified investors token balances at blockchain addresses. J.P. Morgan says it is seeding the fund with $100 million and that the product is designed to support stablecoin issuers under the GENIUS Act.
That announcement matters for two reasons. First, it shows that tokenized cash management in dollars is moving beyond pilot mode. The infrastructure is no longer limited to proof-of-concept settlement experiments. It is becoming productized liquidity management. Second, it shows that the strategic center of gravity is not just retail payments. It is institutional cash. Whoever owns the on-chain equivalent of treasury management, reserve parking, and high-quality collateral transformation will have enormous influence over the next phase of digital finance.
A side-by-side view makes the divergence clearer.
| Europe | United States |
| Policymakers urge banks to accelerate euro stablecoins and tokenized deposits | Major asset managers are already launching tokenized dollar liquidity products |
| Qivalis targets H2 2026 launch subject to approval | JPM’s JLTXX is already live on public Ethereum |
| Demand remains uncertain; two-thirds of surveyed banks see limited euro-stablecoin demand | Dollar demand is reinforced by Treasury depth, stablecoin usage, and institutional reserve needs |
| The challenge is building a credible euro-native response | The challenge is scaling an existing dollar advantage even further |
The larger strategic issue is monetary sequencing. If tokenized finance scales first around dollar instruments, then Europe may find itself in a familiar but newly dangerous position. It will not merely be importing dollar payment rails or relying on dollar funding markets in moments of stress. It could also become structurally dependent on dollar-denominated on-chain cash instruments for settlement, collateral mobility, and treasury optimization. That would extend dollar dominance from traditional finance into the programmable balance-sheet layer of the digital economy.
This is why France’s push for euro-denominated alternatives deserves more attention than a typical innovation-policy speech. It reflects a dawning recognition that the battle is not only about whether Europe can produce a compliant stablecoin. It is about whether Europe can create enough institutional, commercial, and regulatory momentum to keep tokenized finance from defaulting into dollarization. If it cannot, then MiCA may succeed in creating a rulebook without creating a genuine monetary counterweight.
The irony is that Europe may be comparatively well positioned on the regulatory side. It has clearer digital-asset legislation than the United States in several respects and a stronger tradition of supervisory coherence. But regulation alone does not create monetary gravity. The dollar’s advantage comes from the combination of legal adaptability, deep collateral markets, global corporate demand, and the willingness of large institutions to turn traditional cash products into on-chain financial primitives. The J.P. Morgan announcement also notes that roughly $30 billion in traditional assets are now tokenized on public blockchains and that assets in on-chain products have nearly tripled since early 2024. Those are still small numbers relative to global capital markets, but they show where directionality lies.
Europe, then, does not have a stablecoin problem in the narrow sense. It has a digital-currency sovereignty problem. If euro-denominated instruments remain tentative while dollar-denominated instruments become embedded in the operating system of tokenized finance, then the euro risks being present in law but absent in infrastructure. That would leave Europe in the uncomfortable position of watching the next monetary layer globalize around a unit it does not control.
The market is already telling us what comes first. Tokenized cash is scaling where the reserve asset, collateral base, and institutional product machine already exist. Right now, that means dollars. Unless Europe can move from concern to deployment much faster, the continent may discover that the future of programmable money arrived on schedule, only in the wrong denomination.
