There is increasing apprehension within the European Union regarding Donald Trump’s recent efforts to incorporate cryptocurrencies into the US financial framework. The American president has endorsed cryptocurrency adoption by issuing an executive order aimed at creating a Bitcoin reserve and facilitating banking access for crypto companies. This rising acceptance of cryptocurrencies in the United States is raising alarms among European policymakers. During a Eurogroup press conference on March 10, Pierre Gramegna, the Managing Director of the European Stability Mechanism (ESM), cautioned that Donald Trump’s favorable position towards cryptocurrencies could threaten Europe’s financial sovereignty. Gramegna pointed out that the US government’s support for crypto could motivate both domestic and international technology companies to develop widespread payment systems that utilize dollar-pegged stablecoins. He stated, “If this succeeds, it might impact the monetary sovereignty and financial stability of the eurozone.” Stablecoins linked to the US dollar have established a significant presence in the worldwide financial system, boasting a total market capitalization surpassing $224 billion and a transaction volume exceeding $4 trillion in the last month. These statistics highlight the rising importance of stablecoins as a key player in international transactions and digital financial services. In response to the expanding impact of dollar-pegged stablecoins, the European Central Bank (ECB) is intensifying its initiatives to launch a digital euro by 2028. Piero Cipollone, a member of the ECB board, highlighted that Donald Trump’s endorsement of cryptocurrencies tied to the U.S. dollar accelerates the digital euro initiative, which seeks to maintain Europe’s strategic independence regarding global payment systems. On January 23, President Donald Trump made a substantial change to his approach regarding cryptocurrency. On that day, he issued an executive order that banned federal agencies from working on a U.S. central bank digital currency (CBDC), while also detailing a strategy to support dollar-pegged stablecoins globally. During the White House Digital Assets Summit last Friday, Treasury Secretary Scott Bessent reiterated the administration’s goals for digital finance, declaring: “We intend to maintain the U.S. dollar as the leading reserve currency worldwide, utilizing stablecoins to achieve this.”
EU Raises Alarm About Trump’s Cryptocurrency Strategies – Potential Threat to Financial Stability?
