The European Central Bank (ECB) wants native euro reserves on blockchain as Europe stablecoin demand grows, placing public settlement money beside private tokens while opening a wider contest over liquidity, monetary sovereignty, and cross-border payment and settlement systems across the region.
Europe’s endeavors to keep control of euro-dominated digital finance advanced on separate, yet connected, fronts, as the ECB made the case for issuing central bank reserves directly on blockchain, and British fintech, Revolut, launched its first euro-backed stablecoin, on August 26.
The proposal arrives as Euro-backed tokens move from specialist crypto products into mainstream financial applications. Their integration with mobile payments could also support data monetization in telecom, while Revolut advances under European rules and the ECB keep central-bank money at the center of tokenized settlement.
ECB Takes the Euro On-Chain
On Friday, ECB Executive Board member, Isabel Schnabel, speaking at the Jackson Hole economic symposium, argued the central bank should issue euro reserves as a native blockchain asset instead of relying on private stablecoins for settlement.
Her proposal concerns the money banks use to settle transactions with one another, rather than the commercial bank deposits held by consumers.
“Stablecoins are best understood as complements to central bank money, not substitutes for it,” said Schnabel, framing the proposal as one of resilience during financial stress. The ECB can expand the money supply during a crisis, while a stablecoin issuer is limited by its reserve.
The plan would provide tokenized markets with central-bank money capable of supporting large financial transactions. It also sets a public foundation for the EU blockchain market as private payment tokens gain wider use.
Schnabel argues that even a carefully managed stablecoin cannot perform every function of central-bank money during periods of financial stress. A private issuer holds limited reserves, while a central bank can create additional liquidity when demand for cash rises sharply.
Her argument defines the European Central Bank Euro-pegged Stablecoins stance at a time when dollar-linked tokens dominate global markets. Dollar-pegged stablecoins account for about $304 billion in circulation, while euro-pegged tokens remain below $1 billion.
That difference is not only about market size. Allowing private dollar tokens to become the main settlement asset for tokenized finance could increase Europe’s dependence on US currency infrastructure. A native Euro settlement asset could instead give the Euro digital blockchain economy a stronger monetary base.
The ECB’s Pontes project is expected to begin operating in September 2026. It will connect distributed ledger platforms with TARGET Services, the Eurozone’s settlement backbone, allowing transactions to reach finality in central-bank money.
Tests conducted between May and November 2024 involved 64 institutions across nine jurisdictions. Participants completed 58 use cases and settled almost $1.85 billion (€1.6 billion) in Central-Bank money, offering an early view of how the digital Euro blockchain infrastructure could operate.
The first stage will keep the final settlement within TARGET2. Smart contracts and round-the-clock operations are expected later, potentially giving the Europe stablecoin market access to a public settlement layer without removing privately issued tokens.
Revolut Tests Private Euro Demand
While the ECB develops public infrastructure, Revolut has introduced EURR, an Ethereum-based token denominated in euros. The rollout initially covers eligible customers in Denmark, Poland, and Portugal, with other European Economic Area markets expected to follow later in 2026.
EURR is issued by Stripe-owned Bridge under a Markets in Crypto-Assets service provider license and a Luxembourg electronic money authorization. Revolut Digital Assets Europe integrates the token into Revolut’s retail application.
The launch shows how Europe Stablecoin regulation is giving private providers a route into payments while setting rules for reserves, authorization, and consumer access.
It also gives the EU blockchain ecosystem a commercial product connected to more than 80 million Revolut customers worldwide.
Revolut described stablecoins as the “core infrastructure for the crypto economy.”
Customers will be able to move between euros and digital assets on chains, while future support is planned across multiple blockchain networks and external wallets. This could extend Europe stablecoin use beyond trading and into transfers, business payments, and settlement.
For Revolut, EURR is the first part of a broader stablecoin strategy. Other currency-denominated tokens are being developed through separate regulatory routes, placing the company inside a global race involving banks, governments, and payment providers.
The rollout also tests whether a European stablecoin can attract users in a market still led by dollar tokens. Success will depend on liquidity, wallet availability, merchant acceptance, and confidence in the rules governing issuance.
For policymakers, Europe stablecoin regulation must now accommodate private innovation without allowing commercial tokens to displace central-bank money. The ECB’s answer is not to remove Stablecoins, but to give the digital Euro blockchain system its own settlement asset.
This leaves Europe with two connected layers: private tokens for access and payment services, and Central-Bank reserves for final settlement. The Euro digital blockchain model could therefore support competition while keeping monetary authority within the Eurosystem.
The coming test is whether these layers can grow together. A stronger Europe stablecoin market could expand euro use on chain, while native ECB money protects settlement during stress and anchors Europe’s digital financial sovereignty.
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