The U.S. stance on stablecoins presents a larger threat to European citizens than trade tariffs, according to Italy’s Economy Minister, Giancarlo Giorgetti. Speaking at a Milan event centered on asset management, Giorgetti voiced his concerns on Tuesday.
The minister believes that the U.S. policy provides an appealing avenue for cross-border transactions, posing more significant worries than trade tariffs. He urged the European Union authorities to take additional measures to enhance the euro’s standing as a global reference currency and expressed dissatisfaction with the fragmentation of the EU’s payment industry.
The Trump administration has vowed to revamp regulations on cryptocurrencies, reversing a previous clampdown under Joe Biden. Dollar-pegged stablecoins, a form of cryptocurrencies engineered to maintain a steady value, have experienced exponential growth in recent years. They play a pivotal role in the multi-trillion dollar crypto trading sector, facilitating the transfer of funds between various cryptocurrencies or to standard cash.
Giorgetti cautioned that the new U.S. policy on cryptocurrencies, particularly on dollar-denominated stablecoins, could potentially be more dangerous than the impact of trade tariffs. He argued that stablecoins offer savers a chance to invest in risk-free assets and a universally accepted payment method for cross-border transactions without necessitating a U.S. bank account.
“The appeal of stablecoins to citizens of economies with unstable currencies is obvious, but we must not underestimate their potential draw for people in the euro zone,” Giorgetti stated.
To safeguard the role of fiat currencies against the spread of stablecoins and enhance European sovereignty in payments, the European Central Bank (ECB) is developing the so-called digital euro. This plan would allow EU residents to hold digital euro accounts with the ECB for online payments or money transfers through EU-based payment service providers.
Giorgetti emphasized that the digital euro is vital to reduce the need for Europeans to rely on foreign solutions for basic services like payments. However, European banks are worried that a digital euro might drain their funds as customers move some of their cash to an ECB-guaranteed wallet.
