EU Pushes for Digital Euro to Counter U.S. Stablecoin Domination
The European Union (EU) is under increasing pressure to approve a digital euro as a strategic countermeasure to the U.S. administration’s aggressive promotion of dollar-backed stablecoins. European Central Bank (ECB) board member Piero Cipollone has advocated for intensifying efforts to develop the digital euro, emphasizing its importance in preserving the EU’s financial sovereignty amid the global expansion of U.S.-backed stablecoins.
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The Trump administration’s executive order, titled “Strengthening American Leadership in Digital Financial Technology,” has sent ripples across the global digital asset landscape. It outlines a clear strategy to promote the development and widespread adoption of legitimate, dollar-backed stablecoins worldwide.
This initiative has raised concerns among ECB officials, who view it as a threat to the traditional financial ecosystem. Cipollone has voiced his opposition to this U.S.-led push, stating that it could undermine the banking sector by promoting decentralized, bankless financial solutions.
“I think the key term here is worldwide,” Cipollone remarked. “This approach disintermediates banks, leading to a loss of fees and clients. That’s why we urgently need a digital euro to safeguard our financial system.”
Unlike stablecoins, which operate independently of traditional banking systems, the proposed digital euro would work in tandem with banks. It would allow consumers to deposit a limited amount of euros into a digital wallet, facilitating payments for goods and services while maintaining alignment with the banking infrastructure.
In stark contrast, the Trump administration has firmly rejected the idea of introducing a central bank digital currency (CBDC) in the U.S. Citing concerns about financial stability, privacy risks, and national sovereignty, the executive order explicitly prohibits the creation of a U.S. CBDC.
Stablecoins, however, continue to gain traction as one of the most prominent use cases for cryptocurrency. The market capitalization of stablecoins recently reached an all-time high of $213 billion, with Tether’s USDT accounting for a commanding $140 billion of that value.
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The EU’s push for a digital euro reflects its efforts to stay competitive in the rapidly evolving global digital finance ecosystem and counterbalance the rising influence of U.S.-backed digital assets.
