The European Central Bank (ECB) has expressed strong opposition to proposals for expanding euro stablecoin issuance, citing potential risks to financial stability and the effectiveness of monetary policy. This stance comes in response to a policy paper by the Brussels-based think tank Bruegel, which suggested easing liquidity requirements for stablecoin issuers and granting them access to ECB funding to enhance competitiveness against dollar-backed tokens. Currently, euro-denominated stablecoins represent a mere 0.3% of the global supply, despite Europe accounting for 38% of global stablecoin activity. ECB President Christine Lagarde emphasized the risks of undermining traditional banking models and increasing bank funding costs, as well as the potential for disintermediation. The ECB's position reflects a cautious approach to maintaining the integrity of the banking system and monetary policy transmission, while the EU continues to review its Markets in Crypto-Assets (MiCA) framework.