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European Union officials have expressed concerns that U.S. President Donald Trump’s recent pro-cryptocurrency policies could undermine the eurozone’s monetary sovereignty and financial stability. Trump’s executive order to establish a strategic reserve of cryptocurrencies marks a significant shift from previous U.S. policies and has raised alarms among European finance ministers.
Pierre Gramegna, Managing Director of the European Stability Mechanism, highlighted that the U.S. administration’s support for dollar-backed stablecoins might encourage major tech companies to develop payment solutions outside the EU’s regulatory framework. This development could erode trust in the euro and destabilize European financial markets.
In response, the European Central Bank (ECB) is accelerating efforts to introduce a digital euro to maintain control over monetary policy and provide a secure alternative to private stablecoins. The ECB plans to cap digital euro holdings to mitigate potential impacts on banks.
The divergence in regulatory approaches between the U.S. and the EU could lead to economic imbalances, with the U.S. potentially attracting more crypto innovation and investment due to a friendlier regulatory environment. This scenario underscores the urgency for the EU to advance its digital euro initiative to safeguard financial stability and monetary sovereignty.
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