A recent executive order by former US President Donald Trump on advancing US leadership in digital finance has raised concerns in the European Union about the dominance of US dollar-backed stablecoins.
At the 13th ILF Conference in Frankfurt on January 24, European Central Bank (ECB) board member Piero Cipollone emphasized the need for Europe to secure financial autonomy, citing the US dollar’s overwhelming role in the stablecoin market. Currently, dollar-backed stablecoins make up 97% of the $215 billion global stablecoin market, according to CoinGecko. Cipollone stressed that this dominance is a driving force behind the EU’s push for a digital euro to protect financial sovereignty.
Cipollone also pointed to Europe’s growing reliance on US-based payment systems, which handle over 60% of card payments in the EU. Additionally, mobile app payments in the region have grown significantly, reaching 9% of retail transactions in 2024, up from just 1% in 2019.
The Trump administration’s executive order, titled “Strengthening American Leadership in Digital Financial Technology,” focuses on promoting dollar-backed stablecoins as part of a strategy to maintain the US dollar’s global dominance. However, it also explicitly opposes the establishment of central bank digital currencies (CBDCs) in the US, potentially complicating global CBDC development.
Some analysts, like attorney David Lesperance, suggest that the executive order is not just about supporting digital finance but also about protecting the US dollar’s status as the world’s reserve currency. The US may use this stance to push other nations, including the EU, to limit CBDC efforts, further strengthening the dollar’s position in the global financial system.
As the US prioritizes dollar-backed stablecoins and resists CBDCs, Europe faces a challenge in developing its own digital currency while reducing dependence on US financial infrastructure.
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