The rising influence of US-backed stablecoins is putting Europe’s monetary sovereignty at risk, according to Pierre Gramegna, the Managing Director of the European Stability Mechanism (ESM).
Speaking at a press briefing in Brussels, Gramegna expressed concerns over the Trump administration's pro-crypto stance, which includes the establishment of a Bitcoin reserve and support for dollar-backed stablecoins.
🔹 The US Moves to Dominate the Crypto Space
The Trump administration has taken a dramatic turn in its crypto policy:
✅ Bitcoin Reserve: Trump signed an executive order to create a national Bitcoin reserve, signaling a structured integration of crypto into the US financial system.
✅ Crypto Seizures: The US will also stockpile other cryptocurrencies seized through legal actions, reinforcing its control over the digital asset economy.
✅ Stablecoin Growth: The rise of dollar-denominated stablecoins is strengthening the US dollar’s grip on global finance, raising concerns in Europe.
🛑 Europe Fights Back with a Digital Euro
Meanwhile, the European Central Bank (ECB) has taken a different approach:
❌ No Bitcoin in Reserves: Unlike the US, the ECB has ruled out holding Bitcoin in its monetary reserves.
💶 Digital Euro Development: The ECB has been working on a central bank digital currency (CBDC) since 2021, with a final decision expected later this year.
⏳ Launch Timeline: Despite growing urgency, the digital euro is unlikely to be rolled out before 2028 or 2029.
🔻 What’s at Stake for Europe?
Gramegna warns that if US-backed stablecoins continue to expand, they could:
⚠️ Weaken the Euro’s Influence: The dominance of dollar-backed crypto assets could erode the euro’s standing in global trade.
⚠️ Disrupt Financial Stability: Private US-based crypto solutions could challenge European financial institutions and monetary policies.
⚠️ Create Tech Dependence: Europe may become too reliant on American or private digital payment platforms.
🚀 The Urgent Need for a Digital Euro
To counteract these risks, the ESM is pushing for an accelerated rollout of the digital euro.
📢 "The digital euro is more necessary than ever," Gramegna emphasized, urging European policymakers to act swiftly to protect economic sovereignty.
💭 Is the digital euro Europe’s best defense, or is the US already too far ahead in the crypto race?