SS #28 - ECB Pushes Digital Euro as a Failsafe for Europe’s Payments

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Good Morning.

Happy Friday, everyone! As we head into the weekend, Europe made headlines with the ECB pushing the digital euro as a backup in case of cyberattacks or outages. ECB chief Christine Lagarde also called for stricter oversight of non-EU stablecoin issuers. On the industry side, we saw notable funding rounds and acquisition deals in the crypto and stablecoin space.

It’s been a strong week, with the stablecoin market cap growing by $1B in September, and momentum shows no signs of slowing. Let’s dive into the latest news and the stablecoin yields waiting for you.

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In Today's Edition:

• Headline: ECB Pushes Digital Euro as a Failsafe for Europe’s Payments

• Quick Bites: US Federal Reserve to Hold Conference with Focus on Stablecoins, Tokenization

• Yield of the Week: 226.67% APY in USDC on Drift

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HEADLINE

ECB Pushes Digital Euro as a Failsafe for Europe’s Payments

State of play: The European Central Bank (ECB) is positioning the digital euro as a backup payment system to ensure continuity during outages or cyberattacks.

• The digital euro could allow users to access bank accounts via the ECB app even if a bank’s app is offline.

• Offline functionality is being considered as a failsafe during power or network outages.

• The push for a digital euro is also driven by competition from stablecoins and non-bank payment services like Apple Pay and PayPal.

What’s Next: The ECB will likely accelerate its development and pilot testing of the digital euro with a strong emphasis on resilience and offline usability. Expect increased public and industry consultations on technical design, privacy safeguards, and interoperability with existing financial infrastructure.

Why it Matters: The digital euro could safeguard Europe’s payments system during outages while reducing reliance on private stablecoins and Big Tech platforms. For crypto, it signals growing pressure from state-backed alternatives that may reshape stablecoin use in the region.

Our Take: By framing the digital euro as critical infrastructure, the ECB may limit stablecoin use but also legitimize digital assets. The real opportunity lies in building interoperable, user-friendly services beyond what a CBDC can offer.

QUICK BITES

• Utila raised $22M series A.

• Solowin closed $350M Alloyx deal.

• Ripple brings $700M RLUSD stablecoin to Africa.

• US Federal Reserve to hold conference with focus on stablecoins, tokenization.

• USD-backed crypto exchanges see volume boost as US traders regain influence.

• European Central Bank chief urges stricter oversight of non-EU stablecoin issuers.

YIELD OF THE WEEK

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Hyperion USDT-USDC LP: 30.48% APR

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.