The European Central Bank warned that the spread of stablecoins could undermine financial stability and reinforce a U.S. dollar-centred international monetary order. It reiterated that central bank-issued or -backed digital currency infrastructure should take priority over private stablecoins. ECB board member Isabel Schnabel said stablecoins could weaken bank intermediation, trigger bank runs and impair monetary policy transmission, while raising concerns over monetary sovereignty. The ECB is pursuing a digital euro and a wholesale tokenised central bank currency.

Japan\'s ruling Liberal Democratic Party has moved to promote policies to legalise cryptocurrency exchange-traded funds and expand yen-denominated stablecoins. A party panel submitted a proposal to Finance Minister Satsuki Katayama on May 31. The plan aims to recognise crypto ETFs as regulated investment products and develop yen stablecoins as a payment gateway for Asia. The proposal cites the dominance of dollar-pegged stablecoins and points to domestic pilots and legislation steps under way.