(Bloomberg) -- The Trump administration’s support of crypto currencies could hurt Europe’s monetary autonomy, supporting the case for a digital euro, according to a top EU official.
“The US administration is favorable toward cryptocurrencies and especially dollar-denominated stablecoins, which may raise certain concerns in Europe,” European Stability Mechanism Managing Director Pierre Gramegna told reporters in Brussels on Monday.
Donald Trump’s administration has embraced digital currencies, with the US president last week signing an executive order creating a Bitcoin reserve and a separate stockpile of other tokens. Both will contain crypto forfeited as part of legal proceedings, the action said.
Meanwhile, the European Central Bank — which has rejected the idea of adding Bitcoin to its monetary reserves — has been developing a digital euro since 2021 and will make a final decision on whether to implement it later this year.
The changed US stance on digital currencies “could eventually reignite foreign and US tech giants’ plans to launch mass payment solutions based on dollar-denominated stablecoins,” Gramegna said. “And if this were to be successful, it could affect the euro area’s monetary sovereignty and financial stability.”
Therefore the ESM supports the ECB’s “urgency in making the digital euro a reality to safeguard Europe’s strategic autonomy — this digital euro is today more necessary than ever,” he said.
--With assistance from Piotr Skolimowski and Max Ramsay.
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