EU Voices Concerns Over US Cryptocurrency Policy
BRUSSELS – As US policy shifts toward embracing cryptocurrencies, top officials within the Eurozone are expressing anxieties. They say that the alterations could impact the region’s monetary sovereignty and financial stability. This comes after the new US administration, under President Donald Trump, signaled a move to establish a strategic reserve of cryptocurrencies.
“Policy developments in other jurisdictions can have important consequences for us here in Europe,” Paschal Donohoe, the chairman of the ministers, stated during a press conference on Monday. He added, “These discussions are fundamentally linked to our own autonomy and to the resilience of our currency.”
This policy stance marks a departure from the prior US administration. The Eurozone is closely watching these developments, particularly concerning the potential resurgence of technology companies launching their own payment systems using dollar-denominated stablecoins.
Pierre Gramegna, head of the European Stability Mechanism, shared his perspective. He noted the US’s shift could encourage tech firms to introduce new payment solutions, which could have implications for the Eurozone.
“(The) discussion … highlighted that what is at stake here is also European sovereignty,” Gramegna stated. He further elaborated that the US’s favorable view towards cryptocurrencies, especially dollar-denominated stablecoins, could “reignite foreign and U.S. tech giants’ plans to launch mass payment solutions based on dollar-denominated stablecoins.”
Gramegna also expressed worries that the success of such systems “could affect the euro area’s monetary sovereignty and financial stability.”
The European Central Bank (ECB) initiated work on a digital euro in 2020, partly due to concerns raised by Facebook’s earlier plans to launch a digital currency called Libra. Those plans were eventually abandoned, but the ECB continues to work on its own digital currency.
In light of these shifts, Donohoe emphasized the importance of the ECB’s development of a digital euro, noting its critical role in keeping the Eurozone ahead of the curve.
