The ECB pushed back at an EU finance-policy meeting after Bruegel proposed easing liquidity rules for stablecoin issuers and potentially giving them access to ECB funding. Lagarde and other central bankers argued a bigger euro stablecoin market could drain bank deposits, raise funding costs, reduce lending, and make rate transmission harder. The fight is the core EU tradeoff: stablecoin supply grew roughly a third to $300B last year, but euro tokens are still only 0.3% of supply while Brussels worries tougher MiCAR rules could push activity offshore and deepen digital dollarization.

TLDR by @Benthic