The European Commission is reportedly preparing new guidance to ease restrictions on foreign-issued stablecoins such as USDC and USDT. Under the plan, these tokens would match EU-registered versions, removing a key barrier to broader use in Europe's financial system.

The shift comes despite strong objections from the European Central Bank, which has repeatedly warned that unrestrained access to foreign stablecoins could destabilise the eurozone.

ECB President Christine Lagarde has voiced concerns over capital outflows and a potential erosion of monetary control, urging tighter oversight of stablecoin issuers.

The EU's MiCA regulation requires issuers to maintain reserves in European banks and uphold euro-based redemption rights. The changes would exempt some dollar-backed tokens under the EU oversight, bringing rules closer to those in the US and Asia.

The Financial Times reports that the move aims to prevent the EU from becoming a 'flyover zone' in global crypto adoption. Officials are considering compromises, including giving national regulators more discretion in assessing risks tied to foreign stablecoins.

If adopted, the plan could increase the dollar's influence in Europe's digital economy while positioning the EU as a more attractive crypto hub.