Cryptomercantilism vs. monetary sovereignty : dealing with the challenges of US stablecoins for the EU

The current US administration promotes dollar-backed stablecoins-privately issued and supported by US debt-to reinforce dollar dominance worldwide, a strategy we dub "cryptomercantilism." This report studies the EU's 2024 Markets in Crypto Assets Regulation (MiCAR) and its safeguards for the EU's monetary sovereignty. It also compares MiCAR to the proposed GENIUS Act in the US. Under existing policies, USD stablecoins create severe risks for third countries, indirectly also affecting the EU. The EU should counter digital dollarisation by promoting the international role of the euro in a context of enhanced multilateral payment systems. This document was provided by the Economic Governance and EMU Scrutiny Unit at the request of the Committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 23 June 2025.