The Bank of France is pressing Europe to harden its stablecoin rulebook, arguing that MiCA in its current form does not go far enough to contain the risks posed by non-euro tokens in payments. The core concern is no longer simply crypto oversight, but whether dollar-linked stablecoins could become embedded enough in European commerce to weaken the euro’s position inside its own payments system. Denis Beau, the Banque de France’s first deputy governor, made that case again in late March, while Governor François Villeroy de Galhau has echoed the same broader warning in recent speeches on monetary sovereignty and tokenized finance.
What gives the warning force is the structure of the market itself. In January, Villeroy said stablecoins were still about 99% USD-backed, and Beau described today’s ecosystem as predominantly dollar-denominated and largely controlled by non-EU players. For French officials, the danger is a gradual “stablecoinisation” and “dollarisation” of European payments, in which settlement begins to migrate toward private, foreign-currency instruments rather than euro-based money issued inside the Union’s regulatory perimeter.
MiCA is no longer being treated as the finished answer
Beau’s March 26 intervention was explicit about what should change. He said MiCA should be strengthened “particularly to restrict the use of stablecoins for everyday payments,” especially when those tokens are backed by a currency other than the euro, and he also called for much stricter rules on the multi-issuance of the same stablecoin inside and outside the EU to reduce regulatory arbitrage in times of stress. The Banque de France is not asking for cosmetic refinement; it is asking for a more defensive payments perimeter.
That position fits a wider French view that tokenized finance should develop on the foundation of Europe’s existing two-tier monetary system, with public central-bank money and regulated private money coexisting at par. Beau has argued that Europe should support euro stablecoins, tokenized deposits and the digital euro together, while favoring bank or bank-affiliated issuers as structurally safer than non-bank issuers. In that framework, the issue is not whether tokenization should advance, but which forms of digital money should be allowed to anchor it.
The policy argument is really about deposits, lending and sovereignty
The Bank of France’s case also rests on familiar banking concerns. An ECB working paper published in March found that rising stablecoin adoption is associated with lower retail bank deposits and reduced lending to firms, while Reuters reported that wider use of stablecoins in the euro area could weaken monetary-policy transmission and siphon funding away from banks. That turns the stablecoin debate into a balance-sheet issue for the banking system as much as a market-structure issue for crypto.
European policymakers have already been moving in that direction. In February, Reuters reported that euro-area ministers were weighing euro-denominated stablecoins and other digital instruments partly to reduce dependence on foreign-currency stablecoins, while the ESRB in October 2025 warned specifically about risks from stablecoins jointly issued across EU and third-country jurisdictions and called for safeguards or legal clarification. France’s latest intervention is therefore part of a larger European effort to stop tokenized money from defaulting to the dollar.
MiCA itself is now entering its most consequential implementation phase. The stablecoin provisions took effect on June 30, 2024, the broader framework became applicable on December 30, 2024, and the final transitional window for many existing crypto service providers runs only until July 1, 2026. That means the debate is no longer theoretical: Europe is deciding the shape of its digital-money market while the regulatory runway is already narrowing.
The practical implication is that payment providers, issuers and banks should expect a more selective European market, one that is likely to privilege euro-based tokenized money, stricter reserve discipline and tighter control over cross-border stablecoin structures. The policy trade-off is clear: Europe is willing to accept some friction in order to keep monetary sovereignty, payment stability and supervisory control from drifting offshore.