France – Blockchain 2026/27

An overview of France and the European Union’s approach to stablecoin regulation, examining MiCA, euro stablecoins, monetary sovereignty, the digital euro, crypto-assets, and the evolving regulatory framework shaping digital finance.

Tags: 2026/27 / Blockchain / Digital Assets / Melinon / Pascaline Mélinon

Pascaline Mélinon
Lawyer

Pascaline Mélinon is a French lawyer and member of the Paris Bar. She advises French and international clients on digital assets, complex disputes and regulatory matters, and was among the first French lawyers to build a practice in crypto-assets, working in the field since the first wave of initial coin offerings in 2016. She represents corporations, financial institutions and investors across the sector’s legal evolution, from ICOs to non-fungible tokens, decentralised finance and security token offerings, and on the application of European crypto-asset regulation.

She wrote the first book published worldwide on cryptocurrency and Africa, a number two Amazon bestseller in Money and Monetary Policy. She speaks internationally, mentors at the University of Bristol Law School, and leads Mélinon, a growing Paris law firm with five departments, Blockchain and Digital Assets, International Arbitration and Commercial Litigation, White-Collar Crime, Entertainment Law and Medical Law.

Sovereignty by Design? Stablecoin Policy in France and the European Union

A pioneer that became a bystander

France can claim a peculiar distinction in the regulation of digital money. It legislated early, it legislated with teeth, and it watched others reap the rewards. The Loi PACTE of 22 May 2019 created the prestataire de services sur actifs numériques regime, under which registration by the Autorité des marchés financiers, on the conforming opinion of the Autorité de contrôle prudentiel et de résolution, is mandatory for the four core services, namely custody, purchase or sale against legal tender, exchange of digital assets, and the operation of a trading venue. Carrying on any of those services without that registration is prohibited by Article L. 54-10-4 of the Code monétaire et financier and punishable under Article L. 572-23 by two years of imprisonment and a fine of EUR 30 000, and falsely holding oneself out as registered is a further offence under Article L. 572-26.¹ Only the enhanced agrément sat above that mandatory floor as an optional tier. France then drove the push for Union legislation at a time when several member states were markedly more permissive and Switzerland was openly courting the industry, and that posture shaped the Markets in Crypto-Assets Regulation, Regulation (EU) 2023/1114, adopted on 31 May 2023.²

Yet two years into MiCA, the euro is almost invisible in the one corner of digital finance that now matters most for payments. Speaking in May 2026, President Lagarde observed that nearly 98 per cent of stablecoins are denominated in dollars, that two issuers, Tether and Circle, control close to 90 per cent of the market, and that the sector had grown from under USD 10 billion six years earlier to more than USD 300 billion.³ Euro-denominated tokens are a rounding error, together worth around USD 910 million, about 0.3 per cent of a market that by mid-2026 exceeded USD 320 billion. The Union that wrote the world’s first comprehensive crypto rulebook has produced, by its own design, a stablecoin desert. This chapter argues that the paradox is not accidental. It is the predictable consequence of a policy built more to contain a foreign instrument than to cultivate a domestic one, and France sits at the heart of every contradiction the strategy contains.

The architecture of containment

MiCA does not regulate stablecoins by that name. It divides them into electronic money tokens, which reference a single official currency, and asset-referenced tokens, which reference a basket or any other value.⁴ The provisions on both became applicable on 30 June 2024.⁵ The regime is genuinely demanding. Issuers must back the token at par on a 1:1 basis, reserves must be liquid and segregated, redemption at face value must be available at any time, and algorithmic designs without tangible backing cannot meet these requirements.⁶

Two features reveal the instrument’s deeper purpose. The first is the prohibition on paying interest to holders, which defends retail bank deposits against tokenised competition.⁷ The second, and more openly political, is the restriction in Article 23. For an electronic money token denominated in a non-Union currency, in practice a dollar token, used widely as a means of exchange, the issuer must stop issuing once the estimated quarterly average of such transactions within a single currency area exceeds, per day, 1 million transactions and EUR 200 million in value.⁸ No equivalent ceiling constrains a euro token. Its defenders cast the cap as a prudential shield for monetary sovereignty and for the transmission of monetary policy, on the view that a foreign token used at scale for euro-area payments would let foreign monetary conditions seep into the bloc.⁹ The concern is genuine, yet the asymmetry is the tell. A measure that bites only on non-Union currencies is, in effect and by its acknowledged negotiating aim, a tool to limit dollar penetration of European payment markets.

The rationale runs deeper than payments. Dollar stablecoins are backed overwhelmingly by short-term United States government debt, and the GENIUS Act of July 2025 turned that practice into a legal mandate by requiring payment tokens to hold reserves in Treasury bills and dollar equivalents¹⁰. Tether alone reported around USD 141 billion of Treasury exposure at the end of the first quarter of 2026, more than the United States Treasury holdings of several sovereign states, including Germany¹¹. Every European who holds a dollar token therefore lends, indirectly, to the United States Treasury, and President Lagarde has noted that the GENIUS Act itself frames stablecoin expansion as a way to sustain demand for those Treasuries. The more such tokens circulate on the continent, the more European savings finance the American deficit rather than European investment. Containment of the dollar token is, at bottom, a refusal to underwrite a foreign government’s borrowing through the back door of a payment instrument.

The cost of suppression without substitution

The containment worked in the narrow sense that it suppressed the most liquid instrument. Tether chose not to seek MiCA authorisation, and European venues progressively delisted USDT or restricted it to professional clients¹². The difficulty is that suppression of the dollar token has not produced a euro one of comparable scale. Liquidity, not compliance, is the binding constraint, and no regulation can manufacture liquidity by prohibition.

The clearest illustration is French. Société Générale- FORGE issued EUR CoinVertible in April 2023, obtained an electronic money institution licence from the ACPR effective 1 July 2024, and restructured the token as a fully MiCA-compliant electronic money token, among the first in Europe13. By early 2026 it had been deployed on Ethereum, Solana, the XRP Ledger and Stellar, integrated into the SWIFT network for bond settlement in January 2026, and joined by a dollar sibling, USD CoinVertible, launched in June 2025¹³. Its compliance is impeccable and its credibility, anchored to a systemic balance sheet, is real. As at 14 June 2026 its circulating supply was around 119 million tokens, a market value near EUR 119 million, set against Circle’s USDC at about USD 77 billion and Tether’s USDT at about USD 185 billion. The problem of EURCV is not its rulebook. It is that almost no one trades it.

By rendering the European market inhospitable to the most liquid dollar token without first having a euro substitute, the Union changed the brand of the dollar’s dominance rather than ending it. Kaiko data show that USDT trading volume on EU venues fell by more than 70 per cent between the fourth quarter of 2024 and the second quarter of 2025, while USDC volume on the same venues nearly doubled¹⁴. The displaced liquidity flowed to a compliant dollar token, not to a euro one, and USDT itself remained freely available to Europeans through decentralised exchanges and self-custodied wallets beyond the reach of MiCA’s conduct rules. A policy that suppresses one dollar instrument only to watch another take its place, while its preferred euro instrument stays liquidity-starved, has not secured monetary sovereignty. It has rebranded the dependence it set out to cure.

The French dimension and its internal tension

France embodies the Union’s ambivalence with unusual intensity, because it hosts both the most ambitious private euro experiment and the loudest demands for public control. Alongside SG-FORGE, Circle obtained an electronic money institution licence in France in July 2024, making the country a primary European base for the world’s leading compliant dollar issuer¹⁵. Wholesale settlement in central bank money, meanwhile, is being built by the Eurosystem through its Pontes and Appia tracks, an effort in which the Banque de France, having contributed its own settlement platform, DL3S, to the underlying trials, is closely involved¹⁶.

The tension surfaces in the public positions of the Governor of the Banque de France. At the ACPR-AMF Fintech Forum in Paris on 9 October 2025, François Villeroy de Galhau urged the development of euro stablecoins while calling for MiCA to be tightened, in particular by regulating far more strictly the multi-issuance of a single stablecoin from inside and outside the Union, and, together with the Chair of the AMF, by entrusting the supervision of pan-European crypto-asset service providers to the European Securities and Markets Authority¹⁷. The same address that encouraged private euro tokens also advocated centralising the power to constrain them. A regulator who recalls that Europe fell behind partly because of the caution of figures such as himself is admirably candid, but the candour does not resolve the contradiction¹⁸. France wants a euro stablecoin and France wants to hold the leash. It is not obvious that one can have both at scale.

The multi-issuance fault line

If one fault line will define European policy in the coming years, it is multi-issuance, and here the Union’s institutions are openly divided. MiCA regulates the joint issuance of a fungible token by several Union entities, but it does not address schemes in which a Union issuer and a third-country issuer jointly issue an interchangeable token¹⁹. That silence produced divergence among national competent authorities, some treating such schemes as permitted, others as not²⁰.

On 25 September 2025 the European Systemic Risk Board recommended that such third-country multi-issuer schemes not be treated as permitted under MiCA, or else be made subject to a dedicated set of safeguards, supported by an ECB non-paper arguing that the legislators likely intended to confine multi-issuance to Union issuers²¹. The danger is precise. Where a fungible token is issued jointly in the Union and abroad, the safeguards of MiCA reach only the European issuer, yet in a run, holders redeem where protection is strongest and where MiCA forbids redemption fees, namely in the Union, while the reserves needed to honour those redemptions may sit beyond European reach²². The institutions have not converged on a remedy. The supervisors urged restriction, while the European Commission signalled in October 2025 that it did not share their concerns, and the question remained unresolved as at mid-2026²³. The resulting uncertainty is itself a cost, because the longer the ambiguity persists, the more the run risk it describes accumulates.

The sovereignty wager and the slowest weapon

Confronted with a dollar that dominates and a euro that does not, the Union is hedging across three instruments without choosing among them, and the hedge has a timing problem. The first is the private euro stablecoin, exemplified by EURCV. The second is a bank-led alternative, the Qivalis consortium, announced by 9 banks in September 2025, incorporated in Amsterdam in December 2025 with 12 founding members including BNP Paribas, and expanded to 37 institutions across 15 countries by May 2026, targeting a MiCA-compliant launch in the second half of 2026 under the supervision of De Nederlandsche Bank²⁴. The third is the public option, the digital euro, on which the ECB Governing Council decided on 29 October 2025 to move to the next phase, with a pilot possible from 2027 and a potential first issuance during 2029, conditional on the co-legislators adopting the enabling Regulation in the course of 2026²⁵

The ECB’s leadership has made its preference plain. President Lagarde has argued that stablecoins are not an efficient way to strengthen the euro’s international role, and that the better course is deeper capital market integration and a genuine euro safe asset rather than privately issued euro stablecoins²⁶. Executive Board member Isabel Schnabel, drawing lessons from the history of money market funds, has warned that dollar tokens could entrench the dollar’s international dominance, while ECB research has found that a large migration of deposits into stablecoins would weaken bank lending and the transmission of monetary policy, an effect more pronounced in bank-based economies like the euro area²⁷. The intuition is sound. The strategic flaw is sequencing. The Union’s most sovereign instrument, the central bank digital currency, is also its slowest, while the United States moved in the opposite direction with the GENIUS Act of July 2025, accelerating the expansion of dollar stablecoins²⁸. During the years before a digital euro arrives, the dollar token entrenches network effects that, once entrenched, are not easily dislodged. A further contradiction sits inside the public option, because commercial banks fear that a freely held digital euro would drain retail deposits, which is why holding limits have been so central to the negotiation and why the banking sector simultaneously builds its own consortium token²⁹.

A critical assessment

MiCA is a serious and, in prudential terms, admirable piece of law. The criticism is not that it regulates too much, but that it confuses two distinct projects and serves neither completely. As a code of conduct for issuers, it protects holders and disciplines reserves. As an instrument of sovereignty, it penalises the dollar without empowering the euro, it demands sovereignty while deferring its most sovereign tool to the end of the decade, and it leaves multi-issuance suspended in institutional disagreement. France crystallises every strand, pioneering the model, hosting the leading compliant issuers of both currencies, and pressing hardest for centralised control.

The deeper lesson, most relevant to readers concerned with developing economies, is that sovereignty in digital money is unlikely to be won defensively. A token achieves systemic relevance through adoption, and adoption follows liquidity, utility and trust, not prohibition. For jurisdictions with weaker monetary credibility the danger is not abstract, because residents facing inflation or capital controls may simply hold dollar tokens, producing a digital dollarisation that no domestic rulebook can reverse after the fact³⁰.

A path forward

If the diagnosis is that Europe regulates faster than it innovates, the remedy is not to regulate less but to build deliberately while it constrains. Several steps follow from the analysis.

First, sequencing must be corrected. Prohibition without substitution has failed, so the priority is euro liquidity. The Eurosystem’s wholesale settlement track, Pontes, in which the Banque de France is closely involved, is due to pilot in the third quarter of 2026 and can give tokenised markets a euro settlement asset in central bank money years before any retail digital euro of 2029, and without draining bank deposits³¹.

Second, the Treasury-financing logic should be inverted rather than merely feared. A regulated euro stablecoin whose reserves are invested in euro-area sovereign and high-quality liquid assets would channel savings into European debt and the Capital Markets Union, turning the very mechanism that now finances Washington into one that finances Europe. Defensive containment thereby becomes constructive industrial policy.

Third, multi-issuance should be resolved by structure, not by slogan. Rather than an outright ban that fragments access, the Union could require that the reserves backing any token circulating within it be held and ring-fenced inside the Union, neutralising the redemption asymmetry while preserving interoperability with foreign issuers³².

Fourth, supervision should be unified. The proposal advanced by the Governor of the Banque de France with the Chair of the AMF, to place pan-European crypto-asset service providers under direct ESMA supervision, would end the divergence among national authorities that arbitrage now exploits³³.

None of these measures suffices alone. Together they describe a coherent posture, an open market disciplined by common rules, served by a credible public settlement asset, and financed in euro for Europe. Sovereignty, in digital money as elsewhere, is built. It cannot be decreed.

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France – Blockchain 2026/27

Pascaline Mélinon
Lawyer

Sovereignty by Design? Stablecoin Policy in France and the European Union

A pioneer that became a bystander

The architecture of containment

The cost of suppression without substitution

The French dimension and its internal tension

The multi-issuance fault line

The sovereignty wager and the slowest weapon

A critical assessment

A path forward

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Netherlands – Blockchain 2026/27

Luxembourg – Blockchain 2026/27

Slovenia – Blockchain 2026/27

Ghana- Blockchain 2026/27

Israel – Blockchain 2026/27

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The World Bank – Blockchain 2026/27

Germany – Blockchain 2026/27

Mexico – Blockchain 2026/27

Ireland – Blockchain 2026/27

Japan – Blockchain 2026/27

Austria – Blockchain 2026/27

US – Blockchain 2026/27

Foreword IMF – Blockchain 2026/27

UK – Blockchain 2026/27

Brazil – Blockchain 2026/27

India – Blockchain 2026/27

International Blockchain & Digital Assets Review 2026/27

Navigation

France – Blockchain 2026/27

Pascaline Mélinon Lawyer

Sovereignty by Design? Stablecoin Policy in France and the European Union

A pioneer that became a bystander

The architecture of containment

The cost of suppression without substitution

The French dimension and its internal tension

The multi-issuance fault line

The sovereignty wager and the slowest weapon

A critical assessment

A path forward

Thailand – Blockchain 2026/27

Netherlands – Blockchain 2026/27

Luxembourg – Blockchain 2026/27

Slovenia – Blockchain 2026/27

Ghana- Blockchain 2026/27

Israel – Blockchain 2026/27

Indonesia – Blockchain 2026/27

The World Bank – Blockchain 2026/27

Germany – Blockchain 2026/27

Mexico – Blockchain 2026/27

Ireland – Blockchain 2026/27

Japan – Blockchain 2026/27

Austria – Blockchain 2026/27

US – Blockchain 2026/27

Foreword IMF – Blockchain 2026/27

UK – Blockchain 2026/27

Brazil – Blockchain 2026/27

India – Blockchain 2026/27

International Blockchain & Digital Assets Review 2026/27

Navigation

Pascaline Mélinon
Lawyer