When Germany’s Friedrich Merz and France’s Emmanuel macron speak in unison on the future of money, policymakers and markets take notice. Both figures have pressed for a coordinated response to the rise of stablecoins – digital tokens pegged to fiat currencies - arguing that without a clear,internationally harmonized framework the “internet of value” risks fragmenting global finance and eroding national monetary influence.
The debate is no longer theoretical.As private stablecoins proliferate and central bank digital currency projects advance, questions about cross‑border payments, financial stability, consumer protection and regulatory oversight have moved to the top of the agenda. This article examines why Merz and Macron’s call for global stablecoin alignment is more then political posturing: it is a pragmatic blueprint for safeguarding monetary sovereignty, ensuring systemic resilience, and positioning Europe to shape the rules of a rapidly digitizing financial order.
Merz and Macron Are Right: Global Stablecoin Alignment Is Essential for the Internet of Value
European and international leaders have recently underscored a practical truth: for the Internet of Value to function at scale, payment rails must be predictable, transparent and interoperable. Policymakers such as Olaf Scholz’s counterparts,and commentators like Merz and Macron,have called for coherent cross-border rules that reduce fragmentation between national regimes and private issuers. At the technical layer this means aligning on standards for reserve disclosure, redemption rights and anti-money‑laundering compliance so that stablecoins-whether fiat‑backed USDT/USDC tokens or regulated euro‑pegs-can reliably serve as on‑chain settlement units without introducing counterparty novelty. In practice, that alignment reduces frictions between the UTXO‑based world of Bitcoin and account‑based smart‑contract platforms (e.g., ERC‑20), enabling predictable liquidity routing, faster merchant acceptance, and lower FX costs for cross‑border transfers.
market dynamics and recent regulatory developments illustrate both opportunity and risk.The top stablecoin issuers have historically represented roughly two‑thirds of fiat‑pegged supply, and stablecoins today account for a disproportionate share of spot and DeFi liquidity, affecting execution quality and short‑term funding conditions across crypto markets.Conversely, the collapse of algorithmic constructs in 2022 and several high‑profile reserve opacity incidents exposed systemic vulnerabilities: peg failures and solvency doubts can cascade quickly, depressing liquidity and elevating volatility in correlated assets such as Bitcoin. Accordingly, legislative frameworks like the EU’s MiCA regime and ongoing US supervisory proposals aim to impose disclosure, redemption, and reserve‑management standards. These regulatory shifts are consequential for traders, custodians and protocol designers because they alter counterparty risk profiles and the cost of capital for issuers-factors that directly influence market depth, on‑chain settlement speeds and the reliability of stablecoins as a medium of exchange.
For practitioners and newcomers alike, concrete steps can materially lower risk and increase utility as the industry moves toward global alignment. First, users should prefer stablecoins with transparent, frequent reserve attestations and clear legal redemption mechanisms; for custodians and exchanges, operational best practices include segregated reserves and robust custody audits. Second, protocol architects and liquidity providers should prioritize interoperability-support for wrapped assets, cross‑chain bridges with formal security audits, and integration with Bitcoin layer‑2 settlement channels-to ensure composability across ecosystems. Actionable recommendations include:
- Newcomers: use regulated stablecoins on reputable platforms, understand the peg mechanism (fiat‑collateralized vs. algorithmic), and keep stablecoin allocations limited relative to total portfolio risk exposure.
- Experienced users: monitor reserve attestations and on‑chain flows (transfer volumes,mint/burn activity),diversify across regulated issuers,and employ DeFi primitives with audited contracts and clear governance risk models.
- Institutions: engage in policy dialog, support standardization efforts, and adapt treasury systems to accept tokenized settlements to capture efficiency gains while controlling compliance risk.
Taken together, these measures-backed by multinational regulatory alignment-will strengthen the plumbing that lets Bitcoin and broader crypto markets realize a resilient, scalable Internet of Value rather than a patchwork of incompatible payment silos.
Coordinated Regulation and Standards Are Imperative to Balance Innovation with Financial Stability
As distributed ledger technology matures, policymakers and market participants increasingly recognize that uncoordinated national approaches can amplify fragility in the broader financial system. Bitcoin’s permissionless blockchain and associated markets operate across borders, yet key infrastructure – from fiat on‑ramps to custodial exchanges and stablecoins – remains subject to jurisdictional fragmentation. Notably, high‑profile failures such as the Terra collapse illustrated how algorithmic stablecoin breakdowns can produce rapid loss of value and contagion through lending protocols and centralized venues. Consequently, voices calling for multinational alignment – exemplified in the policy commentary “Merz and Macron Are Right. The internet of Value Needs Global Stablecoin Alignment” - argue that harmonized standards for reserve backing, clarity, and governance are essential to prevent systemic risk while preserving cross‑border innovation in programmable money and layer‑2 settlement rails like the Lightning Network.
To be effective, standards must be technical and also supervisory. The European Union’s MiCA framework provides a concrete precedent by imposing reserve, governance and disclosure obligations on e‑money tokens and asset‑referenced tokens; however, global interoperability requires more than regional rules. Uniform expectations around AML/KYC, self-reliant attestations of backing, oracle integrity, and prudential treatment of custodians would reduce regulatory arbitrage and liquidity shocks. Moreover, harmonized stress‑testing and capital buffer requirements for custodial platforms can limit counterparty risk – a lesson underscored by episodes when concentrated exchange holdings temporarily drained on‑chain liquidity. Benefits of coordinated standards include greater institutional participation, lower systemic tail risk, and clearer legal certainty for decentralized finance (DeFi) primitives that depend on reliable price feeds and settlement finality.
For market participants, practical steps bridge regulation and resilience. Newcomers should prioritize platforms subject to clear regulatory oversight and distinguish between custodial and self‑custody models, while using hardware wallets and basic operational security to reduce counterparty exposure. Experienced participants and service providers should engage in industry standard‑setting, adopt third‑party reserve attestations, and implement on‑chain monitoring of metrics such as stablecoin supply ratios, exchange net flows, and liquidity depth across major pairs.Recommended actions include:
- Choose counterparties that publish regular audits or attestations;
- Diversify stablecoin exposure (e.g., between fiat‑backed and regulated e‑money tokens) to mitigate issuer risk;
- Implement conservative leverage limits and perform periodic stress tests reflecting FX, run, and smart‑contract scenarios.
Taken together, coordinated regulation and robust technical standards can preserve Bitcoin’s role as a decentralized monetary asset while enabling the broader crypto ecosystem to scale without imperiling financial stability.
Building Consensus: Policy Principles, interoperability Protocols and Governance Mechanisms for Cross‑Border Stablecoins
Global coordination is now a prerequisite for resilient cross‑border value transfer. As argued in “Merz and Macron Are Right. The Internet of Value Needs Global Stablecoin Alignment”, fragmented national approaches increase the risk of regulatory arbitrage, financial instability and uneven market access. In practice, the stablecoin ecosystem – which has grown into the tens to hundreds of billions of dollars in circulating supply – contains a mix of fiat‑backed, crypto‑collateralized and algorithmic designs, each with distinct risks: fiat‑backed instruments raise custody and counterparty questions, crypto‑collateralized designs face market volatility exposure, and algorithmic models have demonstrated fragility under stress (notably in 2022). Therefore, policymakers and market participants should converge on fundamental policy principles such as mandatory reserve transparency, consistent AML/CFT compliance, and minimum reserve coverage standards-measures that both newcomers and seasoned participants can evaluate when assessing issuer credibility.
From a technical standpoint,interoperability must rest on provable settlement primitives and standardized messaging. Bitcoin contributes deep liquidity and censorship‑resistant settlement, but its UTXO model and limited smart‑contract expressiveness complicate cross‑chain atomicity; consequently, practical implementations rely on a combination of hashed time‑lock contracts, cross‑chain bridges, and layer‑2 settlement rails (for example, Lightning Network for rapid Bitcoin settlement or IBC/Cosmos style packet relay for account‑based chains). To reduce counterparty risk and improve auditability, interoperable stablecoins should adopt cryptographic proofs and common token metadata standards (e.g., canonical transfer and attestation schemas). Actionable steps include:
- Use of weekly or daily attestations by independent auditors and publication of on‑chain proof pointers;
- Implementation of standardized fallback/redemption mechanisms and time‑locked dispute windows to protect counterparties;
- Adoption of chain‑agnostic messaging formats and oracle networks that provide verifiable reserve and FX data feeds.
governance mechanisms must be multi‑stakeholder, legally robust and stress‑tested to prevent contagion across markets. Effective governance blends on‑chain controls (multisignature custody, upgrade quorum thresholds) with off‑chain legal frameworks-contracts that define jurisdiction, dispute resolution and recovery procedures. Regulators should encourage sandbox experiments and require periodic stress tests (for example,modeled scenarios of a 30%+ depeg or a sudden redemption wave) to quantify capital and liquidity buffers. For market participants, practical recommendations include prioritizing issuers that publish frequent, verifiable attestations, engaging in interoperable standards working groups, and designing treasury policies that maintain prudent over‑collateralization (where applicable) and diversified reserve assets. Taken together, these policy principles, protocol standards and governance safeguards can help realize the promise of an interoperable Internet of Value while protecting financial stability and preserving the open‑ledger benefits exemplified by Bitcoin and the broader blockchain ecosystem.
The debate spurred by Merz and Macron underscores a simple but urgent fact: the shift to an “internet of value” will not wait for national parliaments to catch up. Without coordinated rules, common standards and cross‑border infrastructure, stablecoins risk becoming a fragmented patchwork that undermines monetary sovereignty, financial stability and the very efficiency they promise.
Europe can choose to lead by shaping interoperable frameworks, public‑private sandboxes and clear consumer protections – or cede influence to foreign platforms and opaque networks. achieving alignment will require political will, technical cooperation and a willingness to reconcile competing priorities: privacy, stability, innovation and competition.If policymakers accept the premise advanced by Merz and Macron, the immediate task is to translate rhetoric into multilateral action: harmonised regulation, credible supervision and investment in secure rails that connect fiat and crypto ecosystems. The prize is substantial – a resilient,competitive European role in the global financial architecture. The cost of delay could be measured in eroded influence and missed opportunity.
