EU Concerns Over US Crypto Policies And Impact On Monetary Sovereignty

According to Cointelegraph, finance officials within the European Union are expressing concerns over U.S. President Donald Trump's favorable stance on digital assets, fearing it could impact Europe's monetary sovereignty and financial stability. Pierre Gramegna, managing director of the European Stability Mechanism (ESM), highlighted these concerns during a Eurogroup press conference on March 10. Gramegna noted that the U.S. administration's support for cryptocurrencies, particularly dollar-denominated stablecoins, might pose challenges for Europe. He warned that the U.S. crypto pivot could potentially reignite plans by foreign and U.S. tech giants to launch mass payment solutions based on these stablecoins. Such developments, if successful, could threaten the euro area's monetary sovereignty and financial stability. The ESM, an intergovernmental organization established by euro area member states to help countries overcome financial crises, supports the European Central Bank's (ECB) urgency in developing a digital euro. Gramegna emphasized that the digital euro is now more crucial than ever to safeguard Europe's strategic autonomy. Irish finance minister Paschal Donohoe echoed these sentiments, stating that policy developments in other jurisdictions could have significant consequences for Europe. He stressed that discussions around a European central bank digital currency (CBDC) are fundamentally linked to the region's autonomy and currency resilience. In February, the ECB announced its plans to expand the development of its CBDC payment system to facilitate transactions between institutions. The ECB has been exploring CBDCs since 2020, considering both a consumer-facing retail digital euro and wholesale cross-border settlement between central banks. Meanwhile, President Trump has opposed a Federal Reserve CBDC, signing an executive order in January to establish a crypto working group while prohibiting the establishment, issuance, circulation, and use of a U.S. CBDC. The ECB has also dismissed the idea of incorporating Bitcoin (BTC) into its monetary reserves or allowing other European central banks to do so. ECB President Christine Lagarde stated that central bank reserves must be liquid, secure, and safe, implying that crypto assets would not be included. She expressed confidence that Bitcoin would not be part of the reserves of banks under the European Council.