“Do we want to pay with American or European money in the emerging digital economy? This strategic question lies at the heart of current developments surrounding the digital euro, stablecoins, and tokenized deposits.
Who will provide the ‘money layer’—the infrastructure through which digital transactions are processed—in a digital world that operates around the clock?
Stablecoins are currently making massive inroads into this very layer—predominantly as digital dollars so far.
Does Europe have the answer?
The shift of economic activity into the digital realm presents both risks and opportunities for Europe. On the one hand, there is a threat of increased dependence on US-dominated payment infrastructures. On the other, there are opportunities to set our own standards.
Whoever shapes this money layer ultimately exports standards, dependencies, and potentially their own currency.
The geopolitical dimension is equally sobering. Stablecoins denominated in foreign currencies can jeopardize monetary sovereignty; if a domestic currency is displaced, the central bank loses its ability to steer the economy.
The same applies to businesses: those that pay for procurement, wages, and taxes in euros also require digital liquidity in euros to avoid exchange rate risks, complexity, and uncertainty.
Stablecoins are not merely a fringe phenomenon of the crypto scene; they are a potentially efficient building block of modern payment infrastructure. They can accelerate transactions, eliminate intermediaries, and reduce risk by shortening settlement times. A major area of application is emerging, particularly in cross-border payments, which are currently often expensive and opaque.
At the same time, risks exist: issues regarding reserve holdings, governance, and stability are paramount. The architecture of trust is therefore crucial. The competition is not between ‘crypto’ and ‘non-crypto,’ but between well-institutionalized and poorly institutionalized money creation.
Europe has established an important framework through regulation, but that alone is not enough.
The problem: The stablecoin market is currently dominated by dollar-denominated coins, which hold a 97 percent market share. The two major US issuers, Tether (USDT) and Circle (USDC), account for more than 80 percent of global stablecoin market capitalization.
This dominance emerged within a narrow niche serving as a payment medium for crypto trading.
However, the next wave of scaling is expected to occur not there, but in traditional transactions: corporate payments, treasury processes, the settlement of tokenized securities [1], and new 24/7 settlement mechanisms. In these areas, standards and infrastructures have yet to be determined.
Europe’s challenge is not technical feasibility, but rather how to transform exploration, piloting, and regulation into a scalable standard upon which market participants can reliably build. A gap remains, particularly in the corporate sector. While the debate surrounding the digital euro has focused primarily on retail customers, the greatest efficiency gains are to be found in the interbank and corporate environments.
As the new 24/7 digital economy collides with infrastructures based on traditional 9-to-5 working hours, Europe faces a critical question: How can euro liquidity be made programmable, globally available, and seamlessly integrated into tokenized financial and supply chain processes?
The answer lies not in isolation, but in optionality. Europe must ensure that euro-denominated money in the digital realm is just as available and capable as the digital euro.
This requires three steps. First, banks should develop euro-based token solutions embedded within clearly defined standards for reserves and transparency. Second, the Eurosystem must scale digital central bank solutions for the interbank market and establish interoperability. Third, companies should align their processes with programmable payment structures that operate around the clock.
It remains an open question today whether Europe, in the digital economy, will merely be a user of a layer of foreign money or becomes the architect of a euro-based option capable of scaling both within Europe and globally. We have a genuine opportunity here because the decisive market—one extending far beyond crypto trading—is only just emerging. However, we can only seize this opportunity if we shift the debate from idealized visions to the practicalities of construction.
We provide the digital monetary layer—denominated in euros, governed by our rules, and available for our own use as well as for anyone else wishing to adopt it.
Christoph Burger is a Senior Lecturer and Joachim Wuermeling is an Executive in Residence at ESMT Berlin; Wuermeling is also a former member of the Executive Board of the Deutsche Bundesbank.
Secure sovereignty in the digital monetary world is needed now.” [2]
1. Tokenized securities are traditional financial instruments—such as company stocks, bonds, or fund shares—that are formatted as crypto assets and recorded on a blockchain.
This process merges traditional investments with digital technology, allowing assets to be traded, fractionalized, and settled in real-time without relying on traditional trading hours.
How They Work
Instead of relying on paper certificates or centralized brokerage databases, ownership rights and transfer records are managed on distributed ledger technology (blockchain). The digital token can function in a few different ways:
• Native Tokens: The tokens themselves are the official legal securities, with ownership directly tracked on the blockchain.
• Wrapped/Backed Tokens: The token acts as a digital representation of a traditional asset that is locked and vaulted with a licensed financial custodian (like a bank).
• Synthetic Tokens: Digital derivatives that track the price of real-world assets without owning or being backed by the underlying asset itself.
Benefits of Tokenization
• Fractional Ownership: Tokenizing allows high-value assets (like commercial real estate or private company equity) to be split into smaller, more affordable units.
• Instant Settlement: Traditional stock trades can take up to two days to clear. Blockchain tokens can settle instantly, enabling round-the-clock trading.
• Programmability: Using smart contracts, processes like dividend distributions, interest payouts, and compliance checks can be completely automated.
Compliance checks are audits or assessments that ensure your business processes, documents, and systems meet legal, regulatory, and industry standards. They involve verifying adherence to strict rules—such as HIPAA, PCI DSS, or internal policies—to identify risks, prepare for external audits, and prevent costly penalties.
Prominent Examples
Major financial institutions have actively embraced this technology. For instance, BlackRock launched the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) on the Ethereum blockchain, which seeks to maintain a stable value of $1 per token while paying daily accrued dividends. Other popular instances include tokenized U.S. Treasury bills (e.g., Ondo Short-Term US Government Bond Fund) and digital representations of public equities issued by platforms like Backed Finance.
Regulation
Despite their digital nature, tokenized securities are still subject to traditional federal securities laws. Regulatory bodies like the SEC require these offerings to comply with investor protection, anti-money laundering regulations, and registration requirements.
For deeper dives into how these digital assets operate, consult the Statement on Tokenized Securities via the SEC, explore the TD Securities Deep Dive, or read the comprehensive guide by Milk Road.
2. Die Stablecoin-Chance für Europa. Frankfurter Allgemeine Zeitung; Frankfurt. 11 Apr 2026: 31. Von Christoph Burger und Joachim Wuermeling
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