A European Union official has expressed concerns over the potential impact of the United States’ pro-crypto stance on Europe’s financial stability in a press conference that recently took place.
Pierre Gramegna, Managing Director of the European Stability Mechanism (ESM), stated on Monday that the US administration’s support for cryptocurrencies, particularly dollar-backed stablecoins, may pose challenges for Europe’s monetary autonomy.
His comments followed a Eurogroup meeting where officials discussed economic policies affecting the Eurozone. Gramegna suggested that US support for stablecoins could enable American and foreign tech companies to expand payment solutions based on USD-backed digital assets.
This could lead to widespread adoption of dollar-denominated stablecoins across Europe, potentially reducing reliance on traditional banking systems and limiting the influence of the euro in cross-border transactions.
The concern among European policymakers is that if stablecoins become a dominant payment method in Europe, it could weaken the role of the European Central Bank (ECB) and disrupt the region’s financial sovereignty.
Europe’s Digital Euro Push in Response to US Crypto Policies
In response to these concerns, the European Central Bank has been working on the digital euro as a strategic countermeasure to compete with USD-backed stablecoins.
The ECB has outlined its plans to launch a pilot program for the digital euro in Q2 of this year, with a draft regulatory framework expected in Q3.
Officials believe that an official digital euro will help maintain Europe’s control over its financial infrastructure and limit the influence of foreign digital currencies. ECB board member Piero Cipollone has previously emphasized the urgency of accelerating digital euro efforts.
Cipollone warned that if stablecoins tied to the US dollar continue to expand globally under Trump’s policies, they could divert consumers away from traditional banks and shift economic power toward the US financial system.
Cipollone’s concerns align with the broader strategy of European financial institutions, which see the development of a digital euro as essential to preserving Europe’s financial independence.
Trump’s Crypto Policies and Strategic Bitcoin Reserve
Since taking office earlier this year, Trump has actively supported the cryptocurrency sector, signing several executive orders aimed at boosting stablecoins and crypto asset adoption.
Just recently, he approved a new order establishing a crypto asset strategic reserve which included Bitcoin and other major crypto assets. His administration has also indicated plans to sign stablecoin legislation by August, which could further strengthen the role of dollar-backed digital assets in the global economy.
Gramegna reaffirmed that the ESM fully supports the ECB’s urgency in bringing the digital euro to market to safeguard Europe’s financial autonomy.
He emphasized that Europe must act quickly to counterbalance the growing dominance of USD-based digital assets and ensure the long-term stability of the Eurozone’s monetary system.
Featured image created with DALL-E, Chart from TraddingView
