European financial authorities are voicing concerns over former U.S. President Donald Trump’s support for cryptocurrencies, fearing its potential impact on the eurozone’s economic sovereignty and stability.
“The U.S. administration is increasingly embracing digital assets, particularly dollar-backed stablecoins, which raises important concerns for Europe,” stated Pierre Gramegna, Managing Director of the European Stability Mechanism (ESM), during a press briefing following the Eurogroup meeting on March 10.
Gramegna warned that this shift in U.S. policy could reignite efforts by American tech companies to introduce large-scale payment systems powered by dollar-pegged stablecoins. “If such initiatives gain traction, they could pose a significant challenge to the monetary independence and financial security of the euro area,” he emphasized.
In response to these developments, Gramegna underscored the necessity of accelerating the European Central Bank’s (ECB) plans for a digital euro. “Ensuring the swift implementation of a digital euro is more crucial than ever to protect Europe’s strategic financial autonomy,” he added.
The ESM, an intergovernmental financial institution within the eurozone, plays a key role in stabilizing member economies and ensuring long-term fiscal resilience.
Irish Finance Minister Paschal Donohoe echoed these sentiments, emphasizing that policies adopted in other regions could have far-reaching consequences for Europe. “Our discussions on digital currencies directly relate to our financial autonomy and the resilience of the euro,” he stated, underscoring the urgency of a central bank digital currency (CBDC) for Europe’s future.
The ECB has been actively working on developing its CBDC framework, with recent steps taken in February to expand its digital euro payment infrastructure for institutional transactions. The bank has been exploring digital currency solutions since 2020, including retail and wholesale applications for cross-border transactions between central banks.
Meanwhile, Trump has taken a strong stance against the introduction of a Federal Reserve-backed CBDC. In January, he issued an executive order establishing a federal crypto task force while simultaneously banning the creation and circulation of a U.S. CBDC.
The ECB has also dismissed the possibility of adding Bitcoin (BTC) to its monetary reserves. In late January, ECB President Christine Lagarde reaffirmed that central banks must prioritize assets that are “liquid, secure, and reliable,” implying that cryptocurrencies do not meet these criteria. She expressed confidence that Bitcoin would not be incorporated into the reserves of banks operating under the European Council’s jurisdiction.
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