European finance ministers and central bankers from the EU countries debated, on Friday 22 May, the risks and opportunities arising from the development of stablecoins for the Union. The informal talks held in Nicosia between Europe’s finance ministers continued on Saturday 23 May with a discussion on the long-term sustainability of public spending.
“We held productive, forward-looking and frank discussions on the challenges facing Europe’s economy and financial future”, the Cypriot Minister for Finance, Makis Keravnos, said on Saturday morning at a press conference.
Stablecoins. The ministers were able to draw on several expert contributions, including that of the Brussels-based research centre Bruegel. The latter recommends that Union policymakers should not block stablecoins, but should develop competitive European stablecoins in order to avoid this type of cryptocurrency, based on the US dollar, becoming dominant.
According to the think tank, the strategy should be developed around four main strands: - modernise European payment infrastructure, notably by accelerating the ECB’s projects to connect distributed ledger technology (‘DLT’); - no longer require issuers to keep a large share of their reserves in the form of bank deposits; - authorise European issuers to pay interest, within certain limits, to holders of stablecoins; - allow approved issuers of stablecoins to have access to ECB liquidity and support.
According to one source, participants considered that efforts to improve interoperability between platforms and Eurosystem services, notably through the ‘Appia’ and ‘Pontius’ initiatives led by the ECB, should be accelerated.
In addition, ministers also voiced support for a future revision of the MiCA Regulation - the regulatory framework laying down the arrangements applicable to crypto-assets - for which the European Commission recently launched a public consultation (see EUROPE 13871/30).
“We must ensure that it remains innovation-friendly, proportionate and globally competitive”, said the European Commissioner for Economy, Valdis Dombrovskis.
To see Bruegel’s Policy Brief: https://aeur.eu/f/m15
Qivalis expands. Last Wednesday 20 May, the European banking consortium Qivalis announced that 25 new banks had joined its euro-backed cryptocurrency project, scheduled for the second half of 2026. The group intends to strengthen European sovereignty in digital payments and financial infrastructure based on ‘blockchain’ technology (see EUROPE 13765/19).
Fiscal sustainability. On Saturday morning, ministers and central bankers discussed how Europe’s ambitions could be financed - whether in defence, environmental transition, digital transformation or energy security - while coping with limited national budgets.
Drawing on contributions from the International Monetary Fund (IMF) and the European Court of Auditors, “there was broad agreement that the issue of ensuring fiscal sustainability remains a key objective of EU economic and fiscal policy coordination”, Mr Keravnos said.
“In this context, the implementation of the new economic governance framework in a timely, credible, and effective manner remains crucial”, the Cypriot minister underlined.
In its analysis, the IMF notes Europe’s resilience in the face of major shocks, but observes that growth is slowing, export gains are being reversed under the effect of tariffs, and bond markets reflect increased risks. The IMF warns that average debt in Europe could reach 130% of GDP by 2040, which would then require significant fiscal adjustment.
To see the IMF analysis: https://aeur.eu/f/m16 (Original version in French by Bernard Denuit)