The payments industry is undergoing a digital transformation, with the use of mobile wallets and payment apps becoming more prevalent. Fintechs, particularly start-ups, are driving innovation in the sector, offering payment solutions that are free in exchange for personal data. Global technology firms, known as big techs, are leveraging their customer base to expand in the global market, particularly in cross-border transactions. Stablecoins have emerged as a potential solution for innovative payments, offering stability by being pegged to a reference currency or basket of currencies. While stablecoins have the potential to transform the payments landscape and offer more efficient cross-border payments, they also pose risks. These risks include the misuse of personal data, dependence on foreign technologies, and threats to financial stability and monetary sovereignty. Stablecoin issuers may not provide the same level of safeguards as traditional financial institutions, and the payment network of stablecoin arrangements could be a source of instability. Additionally, the dominance of big techs in the payments market could harm competition and consumer choice, as well as raise concerns about data privacy and market power. To address these risks, European authorities are implementing policies such as a retail payments strategy, the possible introduction of a digital euro, and regulatory frameworks for oversight and consumer protection. A multi-sectoral response is necessary, involving central banks, financial regulators, data protection authorities, and competition authorities. It is important to ensure that stablecoins are introduced within a comprehensive policy framework to protect the European financial system and promote the interests of EU citizens.