The European Central Bank (ECB) is pushing for the creation of a digital euro to counter former U.S. President Donald Trump’s support for dollar-pegged stablecoins. ECB board member Piero Cipollone expressed concerns that Trump’s recent executive order on cryptocurrencies could drive people away from traditional banking systems. “The key word here is worldwide,” Cipollone said, referring to Trump’s order.
“This solution disintermediates banks as they lose fees and clients. That’s why we need a digital euro.”
Trump signed an executive order earlier this week calling for an evaluation to create a strategic national Bitcoin and crypto stockpile. The order also promotes the development and growth of lawful and legitimate private sector stablecoins.
It instructs federal agencies to halt any actions related to developing a government-backed digital dollar, known as a central bank digital currency (CBDC).
Ecb’s strategy for digital euro
The administration has also introduced new leadership at the U.S. Securities and Exchange Commission (SEC).
The SEC issued Staff Accounting Bulletin 121, a controversial rule that requires banks to identify crypto assets held on behalf of their customers as liabilities on their balance sheets. The ECB sees these developments as a potential threat to the traditional banking sector in Europe. This is motivating the push for a digital alternative.
These moves come amid increasing global interest in cryptocurrencies and digital finance. The ECB’s push for a digital euro reflects broader concerns about the influence of U.S.-backed digital assets on global markets and traditional banking systems. As the digital currency landscape evolves, both U.S. and European regulatory bodies are seeking to adapt their strategies.
They aim to mitigate potential risks while fostering innovation.
