ECB Board Member Urges Faster Rollout of Digital Euro Amid Trump’s Crypto Support
The European Central Bank (ECB) is under pressure to expedite its digital euro initiative, influenced by former President Trump’s recent support for US dollar-pegged stablecoins. Key points include:
- Trump's stance on stablecoins raises concerns about US dominance in global payments.
- ECB board member Piero Cipollone suggests this could push Europe to establish its own central bank digital currency (CBDC).
- If US-backed stablecoins gain traction in Europe, it may undermine the euro's use and control over local financial systems.
- Cipollone warns that adopting stablecoins could shift deposits from Europe to the US.
- The European Commission proposed digital euro legislation in June 2023, but skepticism has delayed progress.
- Concerns exist that a digital euro could divert deposits from commercial banks, impacting lending and stability.
- The ECB is considering caps on digital euro holdings and ensuring they do not earn interest to address these issues.
- Cipollone anticipates a possible acceleration in legislative processes due to Trump's influence, aiming for a decision by November.
European lawmakers are urged to act swiftly to prevent falling behind in the evolving digital currency landscape.