Euro stablecoins and the digital euro — don't confuse them: regulatory shortsightedness could cost billions
Patrick Hansen, Senior Director of EU Strategy and Policy at Circle, has issued an important clarification that should sober both regulators and market participants. According to him, confusing euro stablecoins (e-money tokens under the MiCA classification) with the digital euro being developed by the European Central Bank (ECB) is not just a terminological error, but a "costly policy mistake that must not be made."
These are two fundamentally different systems operating on different infrastructure, with different legal statuses, and solving different problems. Euro stablecoins are issued on public blockchains (Ethereum, Solana, etc.) and represent a liability of the private issuer to the holder. Their backing consists of reserves held separately. The digital euro, on the other hand, will be a direct liability of the ECB, linked to a user account, and will operate on a centralized, closed two-tier system under the control of the Eurosystem.
Different Ecosystems, Different Goals
The differences are not limited to the technology stack. Euro stablecoins are tools for crypto asset settlements, DeFi liquidity, cross-border transfers, and programmable operations. The digital euro is designed for everyday retail payments — purchases in stores, person-to-person (P2P) transfers, and government payments. These are different layers of the financial system.
Access to these instruments also differs. Stablecoins are obtained through crypto wallets (MetaMask, Phantom) or neobanks. The digital euro will be distributed through traditional banking and payment applications, with mandatory involvement of licensed intermediaries.
Why This Is Critically Important Right Now
Europe is simultaneously developing both directions. On one hand, the MiCA regulation has already created a legal framework for private stablecoins. On the other, the ECB is pushing for the launch of a CBDC. Hansen's main point: one instrument is not a substitute for the other. They do not directly compete but solve different problems. The regulatory approach and policy must be differentiated.
The European Union's success in the digital transformation of finance depends on its ability to develop both instruments in parallel, without substituting one for the other. Confusing the concepts leads to incorrect regulatory decisions that could stifle innovation in one segment in an attempt to protect the other.
Expert Opinion: In my view, Hansen's position is absolutely correct. The market is already seeing attempts by some European politicians to interpret the digital euro as a "state stablecoin," which is fundamentally wrong. Such confusion could lead to excessive regulation of private stablecoins under the pretext of "protecting" the ECB's monopoly. This would kill the competitiveness of the European crypto sector on a global level. A clear separation of functions and legal status is the key to the healthy development of both ecosystems.