European policy-makers can quietly pride themselves on their comprehensive strategy to digitalise the euro. Industry participants may grumble about the onerousness of the Markets in Crypto-Assets framework, but intriguing euro stablecoins are emerging anyway and the rules may become more accommodative.
In parallel, Europe is leading on the important work of digitalising public money for use by the traditional financial system. The digital euro, a now-lonely retail central bank digital currency initiative, seems to be sidestepping controversy in the European Parliament. The resulting ‘multi-moneyverse’, with its European mix of public and private sectors, could even change the long-static reserve status of the single currency.
However, digital money is likely to derive its prowess not from holdings at central banks but from its mobility and agility in an emerging network of artificial intelligence-driven payment architectures. Can the euro become the settlement language of a networked financial system before that role hardens elsewhere? Not as it stands. Policy-makers might need to revisit MiCA, and CBDC design, both first conceptualised in the late 2010s, yet again.
Reserve status and dollarisation
The euro is already hamstrung relative to the dollar because there is an inadequate provision of ‘safe assets’, absent a commitment to joint and several borrowing by the EU, resisted by key member states.
Reserve status has traditionally been the sediment of trade invoicing, capital market depth and geopolitical trust. The Commission’s most recent considerations on boosting this status are anchored in exactly these notions. In a more digital monetary order, part of that status may be formed in settlement networks, wallet infrastructure and the working balances of software agents before it ever gets ratified in the reserve books of central banks.
And while the EU looks to head off the threats of dollarisation via new versions of money, or even boost the euro’s extraterritorial use, Chinese payment companies are getting on with the business of introducing agentic AI into their cross-border payment services.
Balancing monetary sovereignty, financial stability and open composability
For decades, the Mundell-Fleming trilemma has served as a kind of organising principle for open-economy macroeconomics, a reminder that even in an increasingly globalised financial system, policy trade-offs remain binding. Its original formulation, developed in the context of post-war capital mobility and exchange rate regimes, held that a state cannot simultaneously sustain fixed exchange rates, free movement of capital and independent monetary policy.
In today’s context, and particularly in Europe, a similar constraint appears to be taking shape between monetary sovereignty, financial stability and open composability. It is manifesting in the capacity for euro-denominated digital money to move seamlessly across public blockchains, institutional ledgers and increasingly autonomous software agents. Europe can optimise two – it will struggle to maximise all three.
The policy tension is already visible in the multi-issuance debate. The European Central Bank and European Systemic Risk Board have warned that third-country multi-issuance could weaken MiCA’s safeguards, create redemption risks and tilt the market towards non-EU issuers, while MiCA’s design keeps a material share of stablecoin reserves inside the banking system.
ECB officials have also grown more explicit in linking the rise of dollar-denominated stablecoins to the risk of imported monetary conditions, warning that widespread use in payments could transmit foreign monetary dynamics into the euro area and erode monetary sovereignty, particularly as digital payments activity becomes increasingly cross-border and programmable. Some thinkers in the Commission consider these worries to be overdone or already addressed in the regulation.
There is an obverse risk arising from over-prudent management of these comprehensible financial stability concerns: that Europe protects the euro’s perimeter so tightly it ultimately constrains the currency’s usable domain in the very networks where future monetary relevance will be determined.
Designing for autonomous agents
Euro-denominated stablecoins are no longer confined to closed or purely permissioned systems. Several European issuers now operate on public blockchains and support self-custodial or embedded-wallet models – the constraint is subtler. Euro instruments remain fragmented across issuers, chains and distribution networks, with materially weaker liquidity, interoperability and application-layer integration than their dollar counterparts.
The demand side of this shift remains relatively underexplored, not least because much of the European discussion continues to treat digital money as little more than a different wrapper for familiar, human-initiated payments.
In reality, agentic systems are multipliers of money demand. Where a human selects a currency intermittently, an autonomous agent can do so continuously, at machine speed, across application programming interfaces, data flows, collateral movements, compute markets and real-economy commerce. As agents begin to discover, pay and settle without manual interruption, currency choice increasingly becomes a coordination problem in which liquidity gravitates towards the systems where acceptance is deepest, frictions are lowest and interoperability is widest.
This is because an autonomous agent requires money that can be held non-custodially, executed programmatically, bridged across environments and reused without interruption. A system dependent on intermediary validation, restricted wallet logic or fragmented cross-chain liquidity becomes less legible to code and therefore less likely to be selected in machine-driven markets.
The global market is heading in this direction anyway. Coinbase said in February that x402, its HTTP-native protocol for machine-to-machine payments, had processed more than 50m transactions, while Solana reports that x402 activity on its network has surpassed 35m transactions and $10m in volume. Stripe has published tooling for machine-based payments using the same standard, and Coinbase has introduced agentic wallets built around it. From a different direction, Newton is developing a control layer in the form of an authorisation network that applies spending limits, jurisdictional checks and compliance rules prior to execution, with early demonstrations reporting hundreds of thousands of verified agent transactions.
Broader technological shift
At the same time, a broader structural shift is taking place across the technology sector, extending well beyond the confines of the cryptoverse. Cloudflare has been building agentic commerce standards with Visa, Mastercard and American Express for use at merchant scale, and Mastercard has agreed to acquire stablecoin infrastructure firm BVNK to speed its move into blockchain-based money movement. We are moving beyond the horizon of whether machine commerce will exist to the frontiers of which currencies and standards will intermediate it.
What is often underappreciated in this transition is the extent to which its dynamics are fundamentally non-linear: the convenience yield of money shifting from the unit of account to its form factor as small changes in usability compound into decisive advantages at scale. In networked systems, the most valuable money is no longer simply the safest or most familiar, but the one that code can hold, route, verify and reuse with minimal interruption.
Each additional agent is another node, counterparty and source of recursive demand. This helps explain why transactional usage in on-chain systems may increasingly act as a leading indicator of international currency status, rather than a by-product. The ECB’s latest work on stablecoins finds that the macro-financial effects of adoption are non-linear and intensify sharply when scaled.
Ensuring euro stablecoins can compete
Europe should take this seriously because the euro starts from a weak digital base. ECB analysis notes that dollar stablecoins account for about 99% of global stablecoin market capitalisation while euro-denominated stablecoins remain marginal. In that constellation, euro instruments still account for less than 1% of the market.
ECB researchers now argue that widespread foreign-currency stablecoin use could import foreign monetary conditions into the euro area. A strategy that makes euro digital money harder to use across global networks may therefore intensify the very sovereignty problem it seeks to solve, leaving Europe with a respectable reserve currency but a second-order medium of automation.
The challenge is therefore no longer whether regulated euro stablecoins can appear on public blockchains. They plainly can. It is whether regulation, market structure and infrastructure development together make them sufficiently interoperable and widely usable to compete in the environments where machine-native payments and on-chain settlement are scaling fastest.
None of this should be understood as an argument for regulatory naivety. Open composability need not mean imported instability, and global reach need not mean giving up on public anchors. Indeed, Europe may now have the pieces for a more distinctive synthesis than either the American stablecoin-first model or a purely closed continental one.
‘Safe’ is not enough
A digital euro for retail monetary sovereignty, projects Pontes and Appia for tokenised wholesale settlement in central bank money and private euro-denominated instruments able to circulate globally under programmable safeguards rather than territorial confinement. If Europe wants the euro to matter in the emerging multi-moneyverse, it will not be enough to make it safe. It will have to make it natively usable by the systems through which modern finance, and increasingly machine commerce, will actually move.
OMFIF’s Global Public Investor data offer a useful bridge. The 2025 survey of central banks found that nearly 60% of reserve managers plan to diversify over the next one to two years, with a net 16% intending to add to euro holdings. Yet OMFIF also found that no surveyed central bank holds digital assets and 93% have no intention of doing so. Official portfolios are still reading from a more traditional script.
In the multi-moneyverse, the hierarchy of currencies may first be reshaped in settlement networks, API traffic and machine-held working capital, and only later in reserve books. Europe should be careful not to protect the euro out of the very networks that could extend its reach.
John Orchard is Chairman of the Digital Monetary Institute at OMFIF and Erwin Voloder is Head of Policy at the European Blockchain Association.
Join OMFIF in London on 20 May for ‘Preparing Europe for the digital euro: adoption and design features’.
