European Union finance officials are concerned that U.S. President Donald Trump’s favourable stance on cryptocurrencies, particularly dollar-backed stablecoins, could threaten Europe’s financial stability and monetary sovereignty.
Pierre Gramegna, managing director of the European Stability Mechanism, raised concerns during a Eurogroup press conference about the U.S. administration’s crypto-friendly stance. He warned that this could encourage American tech giants to create large-scale payment solutions using dollar-denominated stablecoins, potentially jeopardizing the financial independence of the euro area.
The ESM “supports the ECB’s urgency in making the digital euro a reality to safeguard Europe’s strategic autonomy — this digital euro is today more necessary than ever,” Gramegna emphasized, reaffirming the ESM’s support for the European Central Bank’s (ECB) ongoing efforts to develop a central bank digital currency (CBDC). The ESM, an intergovernmental institution tasked with maintaining financial stability in the eurozone, views the digital euro as a critical tool for preserving Europe’s strategic autonomy.
Irish Finance Minister Paschal Donohoe echoed this sentiment, stressing the broader implications of global crypto policies.
“These discussions are fundamentally linked to our autonomy and to the resilience of our currency,”
Donohoe said, underlining the necessity of a European CBDC to ensure competitiveness in the evolving financial landscape.
The ECB has been exploring digital euro initiatives since 2020, focusing on a retail CBDC for everyday consumers and a wholesale version for interbank transactions. In February, the central bank announced an expansion of its CBDC payment system development, prioritizing settlement mechanisms for institutional transactions.
Meanwhile, Trump has opposed the creation of a U.S. Federal Reserve-issued CBDC, signing an executive order in January to prohibit it and forming a crypto working group. In contrast, the European Central Bank (ECB), led by President Christine Lagarde, has rejected the inclusion of Bitcoin and cryptocurrencies in its monetary reserves, emphasizing that reserves must remain “liquid, secure, and safe” and expressing confidence that Bitcoin will not be added to European banks’ reserves.
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