Europe must move fast on stablecoins, warns Portes
LBS economist urges unified regulation as US races ahead and digital tokens reshape global finance
Professor Richard Portes warns Europe risks ceding the future of digital finance (The future of tokenised finance in Europe, FT, 18 November) unless it accelerates efforts to harmonise stablecoin regulation, a message he has amplified in his leading role on the European Systemic Risk Board’s recent landmark report on stablecoins.
As tokenised finance moves from experiment to infrastructure, Portes argues that Europe stands at a pivotal moment. Stablecoins, digital tokens backed by traditional assets, are shifting rapidly into the mainstream, promising faster payments, cheaper transactions and new ways of moving money across borders. But despite the EU’s comprehensive MiCA framework, national inconsistencies are still holding the bloc back.
The stakes are rising. Member states vary in how they classify and supervise stablecoins, creating a fragmented regulatory environment that market leaders say is slowing innovation. France, Italy and Austria have already called for a unified supervisory regime for major issuers, pointing to “major differences” in how national authorities oversee crypto markets.
Banks and financial institutions are already experimenting at scale. “We are already using smart contracts to streamline and automate financing processes, where stablecoins are an essential part of the money flow,” says Francisco Maroto, Head of Blockchain and Digital Assets at BBVA.
Meanwhile, the US is moving quickly. Washington’s proposed GENIUS Act sets clear rules for dollar-backed tokens, positioning the greenback to dominate cross-border digital payments before euro-based alternatives can gain traction.
For European players, the warning is clear. “Europe should not stay idle,” says Mung Ki Woo, COO for Group Financial Services at Sopra Steria. Without coordinated action, he argues, a rapidly expanding stablecoin market will default to global dollar dominance.
Portes’ message, echoed in the ESRB’s findings, is that Europe still has an opportunity to lead, but only if it acts with urgency and speaks with a single regulatory voice.