Trump crypto push could hurt Europe’s financial stability: Top EU official

Finance officials successful the European Union are acrophobic US President Donald Trump’s clasp of integer assets could impact Europe’s monetary sovereignty and fiscal stability.

“The US medication is favorable toward cryptocurrencies and particularly dollar-denominated stablecoins, which whitethorn rise definite concerns successful Europe,” European Stability Mechanism (ESM) managing manager Pierre Gramegna said astatine a Eurogroup press conference connected March 10. 

Gramegna cautioned that the US crypto pivot “could yet reignite overseas and US tech giants’ plans to motorboat wide outgo solutions based connected dollar-denominated stablecoin,” adding, “And if this were to beryllium successful, it could impact the euro area’s monetary sovereignty and fiscal stability.”  

The ESM “supports the ECB’s urgency successful making the integer euro a world to safeguard Europe’s strategical autonomy — this integer euro is contiguous much indispensable than ever,” helium added.

The ESM is an intergovernmental enactment established by subordinate states of the euro area, helping countries flooded fiscal crises and support semipermanent fiscal stableness and prosperity.

Pierre Gramegna speaking connected US crypto threat. Source: YouTube

“Policy developments successful different jurisdictions tin person important consequences for america present successful Europe,” concurred Irish concern curate Paschal Donohoe. 

“These discussions are fundamentally linked to our ain autonomy and to the resilience of our currency,” helium added, stating that a European cardinal slope integer currency (CBDC) was present captious to staying up of the curve.

In February, the European Central Bank said it was expanding the improvement of its CBDC outgo strategy to settee transactions betwixt institutions. The ECB has been exploring CBDCs since 2020, including a consumer-facing retail integer euro and wholesale cross-border colony betwixt cardinal banks.

Meanwhile, Trump has spoken retired against a Federal Reserve CBDC, signing an enforcement order successful January to found a crypto moving radical portion prohibiting the “establishment, issuance, circulation, and use” of a US CBDC. 

Related: Crypto academics slam arguable ECB insubstantial blasting Bitcoin

The ECB has besides rejected the idea of adding Bitcoin (BTC) to its monetary reserves oregon allowing different European cardinal banks to bash so. 

In precocious January, ECB President Christine Lagarde said that the reserves of cardinal banks person to beryllium “liquid, unafraid and safe,” implying that they would not see crypto assets. 

She added that she was “confident” that Bitcoin would not participate the reserves of banks nether the European Council. 

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