The dollar went on-chain, the euro went to committee

Just over a year ago, I wrote about how we were entering the era of a convergence between finance, technology and regulation. That convergence is now happening—but not everywhere in the same way.

In the US, technology and regulation are increasingly moving in the same direction. The CLARITY Act is still awaited, having failed to secure the 60 votes required to advance in the Senate on 15 September.¹ But focusing on Congress misses the bigger shift. US regulators have opened the door to innovations the industry spent years trying to advance: generic listing standards for crypto ETFs, regulatory clarity for certain DeFi user interfaces, a framework for tokenised securities venues, and DTC's tokenisation of securities, among others.² One of the SEC staff's most recent FAQs, while non-binding, went further still. It suggested that once a network is functional, promoting its utility, continuing to build functionality and even announcing a token buyback do not necessarily constitute the essential managerial efforts that would make the token a security.³

This is more than regulatory housekeeping. The question itself is changing. For years, America asked: how much crypto can we fit inside the existing financial system? It is increasingly asking: how much of the financial system can we put on crypto rails?

The timing matters. On-chain activities are becoming tangible businesses. Perpetual futures venues, options exchanges, credit platforms and yield-bearing stablecoins can now be analysed like any other business: users, volumes, revenues, margins and cash generation. I no longer need to give names. They are the ones whose tokens are repricing fastest to the upside.

After years in which crypto rewarded storytelling, the market is rediscovering the value of execution. The fact that financial institutions increasingly embrace on-chain products is no coincidence. These rails offer a novel way to distribute products, move collateral and conduct financial activity around the clock.

And another frontier is emerging. 

A growing number of projects are using crypto to reward AI inference, the actual computational work performed when models process requests. This opens a new world where computation can be sold by the unit of work and settled instantly, machine to machine. Imagine the logical conclusion: machines buying computation from machines, paying autonomously for data, storage, bandwidth and intelligence.

Machines don't need branches. They don't sleep. And they probably won't wait three business days for settlement. If that loop holds, it starts looking less like a crypto niche and more like early plumbing for a machine economy. Autonomous economic actors will require financial infrastructure designed for software. By construction, permissionless and programmable rails may be uniquely suited to hosting that activity in a trust-minimised manner.

Once again, open rails versus closed architecture

On the other side of the Atlantic, the European Central Bank launched Pontes in September, connecting market DLT platforms with the Eurosystem's TARGET Services so that tokenised asset transactions can settle directly in central bank money. Christine Lagarde presented it as part of building a “more integrated, innovative and resilient European financial market”.⁴

Technically, this is progress. But Europe may be solving the wrong problem extremely well.

In the United States, regulators are increasingly creating room for markets to experiment with bringing existing financial assets onto new rails, including, for now, through controlled and permissioned structures. Europe, by contrast, continues to build its tokenisation strategy around institutionally mediated infrastructure anchored to the existing central-bank settlement architecture.

There is nothing inherently irrational about that. Central banks care about stability. Regulators care about control. Commercial banks care about their role in the monetary system.

But technological transitions rarely ask incumbents which parts of the old architecture they would like to preserve. The internet did not become successful because governments built a better fax network. The cloud did not win because corporations built larger server rooms.

Open systems tend to look chaotic before they look inevitable. Open standards compound because anyone can build on them, while closed ones grow only as fast as their owners allow. We are seeing a version of the same debate in AI, where open-weight models, dismissed not long ago as toys, are steadily winning adoption against their closed rivals.

Finance may now be confronting the same choice. Europe is asking how blockchain technology can improve the existing financial system. America increasingly appears willing to ask whether the financial system itself should migrate onto blockchain infrastructure. Those questions sound similar. They lead to very different destinations.

And nowhere is that divergence more visible than money itself.

While the ECB continues to push its separate retail digital euro project despite continuing concerns from European commercial banks, something much less centrally coordinated has already happened elsewhere.

The dollar went on-chain. US dollar-denominated stablecoins now circulate around the world, providing access to dollar liquidity in markets where traditional dollar banking may be expensive, slow or unavailable. They reinforce dollar distribution globally and, through their reserves, create additional demand for dollar-denominated assets, including US government debt. No central bank designed this distribution network. No international monetary conference agreed on its architecture. No committee decided that stablecoins should become one of the largest applications of public blockchains. The market simply built it. 

Compare the supply of regulated or offshore US dollar stablecoins, over $300 billion, with euro-denominated ones at less than $1 billion, and you will see apples and oranges.⁵ But this goes beyond simply a crypto statistic. It is a monetary one. It raises a more uncomfortable question for Europe: What if the most important digital currency project of the last decade was not a CBDC at all?

Stablecoins are becoming a distribution technology for currencies. Every additional wallet capable of holding dollars becomes another endpoint of the dollar system. Every blockchain operating 24/7 becomes another potential settlement network. In other words, while Europe has spent years debating how to create a digital euro, private markets have been quietly building a global digital distribution network for the dollar.

I do not see a permissioned settlement layer, or a digital euro, solving this asymmetry over time. Quite the opposite, actually. Because monetary influence in the digital age may not simply belong to the currency with the best central-bank infrastructure. It may belong to the currency that is easiest for software and eventually machines to use.

It is a shame, as many of crypto's most efficient businesses were born in Europe. Yet much of their liquidity, collateral and economic activity is denominated in dollars.

Europe regulated first. The US moved later.

But perhaps the real competition was never about who could write the first crypto rulebook. It was about which jurisdiction would allow entrepreneurs to build the financial infrastructure people actually choose to use. And this is where Europe should be careful.

Infrastructure markets have a habit of looking competitive for a long time and then suddenly becoming standards. Once liquidity, developers, collateral and applications begin concentrating around one set of rails, reversing that gravitational pull becomes extraordinarily difficult.

The euro does not need another committee to tell us that tokenisation matters. It needs an ecosystem that makes people want to tokenise euros. The dollar went on-chain almost by accident on the 6th October 2014 on the Omni Layer designed on top of Bitcoin. 

Europe should ask itself whether, by the time the digital euro is perfectly designed, anyone outside Europe will still be waiting for it.

Sources

1. US Senate, cloture vote on H.R. 3633, Digital Asset Market Clarity Act, 15 September 2026

2. SEC: approval of generic listing standards, September 2025; Division of Trading and Markets statement on Covered User Interface Providers, 13 April 2026; Innovation Exemption, 17 September 2026; no-action letter to The Depository Trust Company, December 2025

3. SEC Division of Corporation Finance, crypto asset FAQs, 25 September 2026

4. ECB, "Eurosystem brings central bank money to tokenised finance", 21 September 2026

5. Token Terminal, circulating stablecoin supply by denomination, 27 September 2026