As the world moves towards a more diversified financial ecosystem, stablecoins not tied to the US dollar are beginning to attract considerable attention. During a recent interview at Token2049, Dea Markova, Director of Policy at Fireblocks, highlighted that governments outside the United States, including Singapore, are increasingly exploring these alternatives. Despite their currently limited liquidity, the shift towards non-dollar stablecoins can be seen as an effort for financial sovereignty.
Markova noted that the competition with dollar-pegged stablecoins is fundamentally about sovereignty, drawing parallels to the historical tensions between US payment giants like Visa and Mastercard. She emphasized the growing dynamic surrounding stablecoins as they transition into a new arena for sovereign concerns, albeit on a smaller scale at present.
Particularly within the European Union, dollar-pegged stablecoins are facing significant challenges. Markova pointed out that these coins are already encountering considerable resistance from central banks, despite being compliant with regulations. The European Central Bank is placing increasing pressure to accelerate the development of a digital euro as a countermeasure against the systemic impacts of dollar-linked stablecoins.
In light of these developments, the Bank of Italy has also raised concerns regarding the reliance of dollar-pegged stablecoins on US Treasury bonds, citing potential systemic risk vulnerabilities. This notion presents a larger picture of tensions where current dollar-pegged stablecoins dominate the market, with Tether’s USDT and Circle’s USDC holding approximately 87.2% of the total market capitalization for stablecoins, which totals around $241.8 billion according to DefiLlama.
In contrast to this regulatory pushback in Europe, Markova highlighted the United Arab Emirates (UAE) as leading in progressive regulatory approaches concerning stablecoins. She cited Abu Dhabi’s policy of not requiring stablecoin issuers to be domiciled or licensed locally, which is unlike Europe’s more stringent regulations. This strategy allows local businesses to access global liquidity and payment solutions more effectively.
Additionally, the UAE has made strides in recognizing stablecoins within its financial infrastructure; USDT received approval as a recognized virtual asset in December 2024, and USDC followed suit in late April 2025. Abu Dhabi institutions are also collaborating to launch a regulated dirham-pegged stablecoin, further indicating the emirate’s forward-thinking regulatory framework.
As the market for stablecoins continues to evolve, the appeal for non-dollar pegged alternatives grows. The competitive landscape presents a unique opportunity for countries to assert financial sovereignty and explore innovative blockchain solutions.
