EU Expresses Concerns Over US Cryptocurrency Policy
BRUSSELS – Eurozone finance ministers have voiced concerns that the United States’ shift towards embracing cryptocurrencies under a new administration could destabilize the financial landscape of the euro area. Top officials made this known following recent discussions.
Following the signing of an executive order by U.S. President Donald Trump, who pledged to be a “crypto president” during his campaign, a strategic cryptocurrency reserve is set to be established using government-owned tokens. This policy represents a significant departure from the previous administration’s stance.
“Policy developments in other jurisdictions can have important consequences for us here in Europe,” stated Paschal Donohoe, chairman of the finance ministers, during a news conference. The ministers discussed the U.S. cryptocurrency developments in detail. He further emphasized the importance of the ongoing creation of a digital euro by the European Central Bank (ECB) as being crucial to maintaining a competitive edge.
“These discussions are fundamentally linked to our own autonomy and to the resilience of our currency,” Donohoe asserted.
The ECB has been actively working to create a digital euro since 2020. The initiative was spurred partly by Facebook’s announcement in the previous year to launch Libra, its own digital currency, a plan that raised concerns among regulators in both the U.S. and Europe. Facebook’s project was eventually renamed Diem, but dissolved at the beginning of 2022
Pierre Gramegna, the head of the European Stability Mechanism, the euro zone’s bailout fund, highlighted that the U.S.’s new perspective on cryptocurrencies could encourage major tech companies to once again explore launching their own payment systems.
“(The) discussion … highlighted that what is at stake here is also European sovereignty,” Gramegna told reporters. “The U.S. administration’s stance on this compared to the past has changed: the U.S. administration is favourable towards cryptocurrencies and especially dollar-denominated stablecoins, which may raise certain concerns in Europe that it could reignite foreign and U.S. tech giants’ plans to launch mass payment solutions based on dollar-denominated stablecoins,” he explained, referring to digital assets pegged to the dollar. He warned against the potential repercussions, stating, “If this were to be successful, it could affect the euro area’s monetary sovereignty and financial stability.”