The EU fears that Trump’s support for dollar stablecoins strengthens the dominance of the dollar and weakens European monetary autonomy.
The European Union (EU) is concerned about the Trump administration’s support for cryptocurrencies, particularly dollar-backed stablecoins. Pierre Gramegna, Director General of the European Stability Mechanism (ESM), warned about the consequences of this policy during a press conference after a meeting of the Eurogroup. According to him, this dynamic could weaken Europe’s monetary autonomy and strengthen the dominance of the dollar in the digital economy.
Trump and Crypto: A Threat to Europe’s Monetary Sovereignty
Gramegna fears that the encouragement of dollar stablecoins by the United States will prompt major American and international technology companies to deploy mass payment solutions based on these assets. Such a development could compromise Europe’s financial sovereignty by diverting a portion of economic transactions to dollar-based instruments, making the euro less influential in global trade.
The European Stability Mechanism, an intergovernmental institution responsible for preserving the financial stability of the eurozone, believes that this trend could weaken the European banking system by reducing its role in monetary issuance and cross-border payment management.
The Acceleration of the Digital Euro Project
In response to this threat, the European Central Bank (ECB) is intensifying its efforts to implement the digital euro. After years of research and testing, the institution plans to announce the deployment details of this digital currency in the second quarter, with a finalized regulatory framework by the third quarter.
Piero Cipollone, a member of the ECB Executive Board, emphasized the urgency of finalizing this alternative to counter the growing influence of dollar-backed stablecoins, especially as the Trump administration seeks to promote their global adoption. He warns that this American policy could encourage consumers to abandon traditional banks in favor of digital solutions led by private actors.
Trump’s Pro-Crypto Strategy
Since his presidential campaign, Donald Trump has expressed strong support for the crypto industry. As president, he has signed several executive orders favorable to the sector, particularly to encourage the expansion of dollar stablecoins internationally. More recently, he announced the creation of a strategic reserve in bitcoins and a national stock of digital assets. He also hopes to see legislation on stablecoins by August.
Europe Facing a Strategic Dilemma
Pierre Gramegna emphasizes the need for Europe to react quickly.
The ESM supports the ECB’s urgency in making the digital euro a reality to preserve Europe’s strategic autonomy.
As the digital dollar could become a global standard in synergy with Bitcoin, Europe must decide whether to accelerate its digital monetary development or risk a progressive marginalization of the euro in the face of American financial innovations, while maintaining its current strategy.
