France, Germany and the ECB worry about Russian retaliation targeting European assets, and also the potential impact on financial stability and the euro’s status as a reserve currency. There’s concern that depositors from emerging economies may be encouraged to pull money out of western banks, fragmenting the global financial system.

US Treasury Secretary Janet Yellen downplayed such risks in February, arguing that “there are not alternatives to the dollar, euro, yen.” She said that if the G-7 acted together then the group would be representing half of the global economy and all of the currencies that really have the capacity at this point to serve as reserve currencies.

https://www.msn.com/en-us/news/world/why-seizing-russian-assets-to-fund-ukraine-is-fraught/ar-BB1jHeKz

I agree with you, they should just be able to tap the assets directly. Basically some European countries are worried about the effects seizing assets could have on the Euro. Most of these assets are held in Europe as euros. The loan is actually an improvement over the original proposal though. Originally France Germany, etc were pushing only for the 3 billion in interest a year on the assets to be given to Ukraine. The loan solution was pushed by other countries who wanted to give them more cash from the Russian assets as a way to give $50 billion in cash immediately, with those yearly interest payments from Russian assets being used to pay off the loan.