BRUSSELS (Reuters) – Euro zone finance ministers are worried that the change of policy under the new U.S. administration to embrace cryptocurrencies could affect euro zone monetary sovereignty and financial stability, top officials said on Monday.
Last week, U.S. President Donald Trump, who vowed to be a “crypto president” in his campaign, signed an executive order to establish a strategic reserve of cryptocurrencies by using tokens already owned by the government, in a policy pivot from the previous administration.
“Policy developments in other jurisdictions can have important consequences for us here in Europe,” the chairman of the ministers Paschal Donohoe told a news conference after the ministers discussed U.S. cryptocurrency developments.
“These discussions are fundamentally linked to our own autonomy and to the resilience of our currency,” he said, adding the creation of a digital euro by the European Central Bank was now critical to staying ahead of the curve.
The ECB has been working on creating a digital euro since 2020, after Facebook announced a year earlier it wanted to launch its own digital currency called Libra. The Facebook plan raised concerns among regulators in the U.S. and in Europe.
The Libra project was later renamed Diem and fizzled out at the start of 2022, but Pierre Gramegna, the head of the euro zone bailout fund, the European Stability Mechanism, told reporters the U.S. embrace of cryptocurrencies could spur big technology companies to again launch their own payment systems.
“(The) discussion … highlighted that what is at stake here is also European sovereignty,” Gramegna said.
“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 said, referring to digital assets pegged to the greenback.
“If this were to be successful, it could affect the euro area’s monetary sovereignty and financial stability,” he said.
(Reporting by Jan Strupczewski; Editing by Lincoln Feast.)
Comments