EU Concerned Over Trump’s Crypto Plans – Financial Stability at Risk?

• The European Union is expressing growing concern over Donald Trump’s recent initiatives to integrate cryptocurrencies into the American financial system.
• The US president has promoted crypto adoption by signing an executive order to establish a Bitcoin reserve and ease banking access for crypto firms.

The United States’ growing support for cryptocurrencies is stirring concerns among European policymakers. Speaking at a Eurogroup press conference on March 10, Pierre Gramegna, Managing Director of the European Stability Mechanism (ESM), warned that Donald Trump’s pro-crypto stance could pose significant risks to Europe’s financial sovereignty.

Gramegna highlighted that the US administration’s pro-crypto stance might encourage foreign and domestic tech giants to expand mass payment solutions using dollar-denominated stablecoins. He added, “And if this were to be successful, it could affect the euro area’s monetary sovereignty and financial stability.”

Stablecoins pegged to the US dollar have already cemented their place in the global financial system, with a combined market capitalization exceeding $224 billion and a transaction volume of over $4 trillion in the past 30 days. These figures underscore their increasing role as a dominant tool in cross-border payments and digital finance.

To counteract the growing influence of dollar-backed stablecoins, the European Central Bank (ECB) is ramping up its efforts to introduce a digital euro by 2028. ECB board member Piero Cipollone emphasized that Trump’s support for U.S. dollar-pegged cryptocurrencies adds urgency to the digital euro project, aiming to preserve Europe’s strategic autonomy in the face of global payment systems.

Trump’s Pro-Crypto Initiatives

President Donald Trump’s crypto strategy took a significant turn on January 23 with a major policy shift. That day, he signed an executive order prohibiting federal agencies from pursuing a U.S. central bank digital currency (CBDC) while simultaneously outlining a framework to promote dollar-backed stablecoins on a global scale.

During the White House Digital Assets Summit on Friday last week, Treasury Secretary Scott Bessent reinforced the administration’s vision for digital finance, stating: “We are going to keep the U.S. dollar the dominant reserve currency in the world, and we will use stablecoins to do that.”

As we’ve reported, Trump is also set to reverse Biden’s anti-crypto policies through another executive order. This move primarily targets “Operation Chokepoint 2.0”, a controversial initiative that allegedly restricted crypto companies’ access to banking services. Trump has gone even further by signing an executive order to establish a strategic Bitcoin reserve. The plan involves accumulating Bitcoin using budget-neutral strategies, leveraging digital assets seized in legal proceedings to build up holdings.

Meanwhile, the European Central Bank (ECB) remains firmly against Bitcoin as a reserve asset. ECB President Christine Lagarde has reiterated that central bank reserves must be “liquid, secure, and safe,” implying that Bitcoin does not meet these criteria.

But tensions between the U.S. and the EU extend beyond crypto policy. Trump has unveiled plans to impose a 25% tariff on EU goods, with a particular focus on the automobile sector. This move threatens to escalate transatlantic economic friction, complicating Europe’s ability to navigate Donald Trump’s influence in digital finance.

As of now, Bitcoin is trading at $81,339, reflecting a slight 0.56% decline over the past day.