President Trump’s Crypto Support Threatens Europe’s Monetary Control, ESM Chief Says

Highlights:

• Trump’s support for crypto raises concerns over Europe’s financial stability and sovereignty.
• Europe speeds up digital euro development to safeguard strategic autonomy amid U.S. crypto shift.
• ECB rejects Bitcoin for reserves while Trump pushes crypto integration in the U.S. financial system.

U.S. President Donald Trump’s support for cryptocurrencies is raising concerns within the European Union (EU). During the Eurogroup press conference on March 10, European Stability Mechanism (ESM) Managing Director Pierre Gramegna stated that the U.S. administration’s favorable stance on cryptocurrencies, particularly dollar-backed stablecoins, could pose challenges for Europe.

“If this were to be successful, it could affect the euro area’s monetary sovereignty and financial stability,” he cautioned. Gramegna suggested that the U.S. crypto shift might encourage foreign and U.S. tech giants to revisit plans for dollar-backed stablecoin payment solutions. He indicated that if such efforts succeeded, they could impact the euro area’s monetary sovereignty and financial stability. 

The ESM emphasized the need to accelerate the digital euro’s development, highlighting its importance in preserving Europe’s strategic autonomy. Gramegna noted that the digital euro is now more essential than ever.

Europe Speeds Up Digital Euro as U.S. Backs Crypto

The digital euro is a safe, government-backed currency designed to work alongside cash and reduce dependence on private or foreign digital payments. The European Central Bank (ECB) wants to keep the euro as the main currency in Europe’s financial system. It aims to protect control over money while giving people and businesses a stable alternative to cryptocurrencies and stablecoins. The digital euro would also help more people access banking services and lower transaction costs across the eurozone.

Trump’s crypto support goes beyond words. He recently signed an executive order to create a Bitcoin reserve and a separate storage system for seized digital assets. Moreover, Trump plans to sign an executive order easing banking access for crypto firms. Sources say the order will undo restrictions from Operation Chokepoint 2.0 and may exclude stablecoins from securities classification.

Crypto is now firmly part of the U.S. financial system, marking a shift from past skepticism. While the U.S. embraces crypto, Europe remains cautious. The ECB has been working on a digital euro since 2021, but a final decision is still months away. Unlike the U.S., the ECB has rejected Bitcoin for its reserves. Now, Trump’s latest move has pushed European leaders to speed up their efforts to avoid financial instability.

ECB President Bitcoin Will Stay Out of Central Bank Reserves

Speaking to members of the press on Jan. 30, European Central Bank President Christine Lagarde stated that the European Council believes central bank reserves should be “liquid, secure, and safe,” meaning Bitcoin would not be included. She expressed confidence that Bitcoin would not be part of bank reserves.

Lagarde responded to concerns after Czech National Bank Governor Aleš Michl suggested adding Bitcoin to diversify reserves. On Jan. 30, the Czech National Bank’s board voted to explore other asset types but did not specifically mention Bitcoin.