EU Urges Swift Action Against US Stablecoins to Protect Euro Stability
European officials warn that US-backed stablecoins threaten the euro's stability and the EU's financial sovereignty. Key points include:
- The European Central Bank (ECB) is advancing the digital euro project to mitigate risks from US stablecoins.
- The European Stability Mechanism (ESM) expresses concern over US banks offering stablecoin services without regulatory approval.
- Pierre Gramegna, ESM Managing Director, emphasizes the need for swift action to safeguard EU financial independence.
- Gramegna states that large-scale US payment solutions using dollar-backed stablecoins could undermine the eurozone’s monetary sovereignty.
- The ECB warns that reliance on US stablecoins may weaken the euro and increase dependence on the US dollar.
- The ESM supports the ECB’s digital euro initiative and efforts to update the MiCA directive to limit reliance on US-backed stablecoins.
- The US government is increasingly promoting stablecoins, with Federal Reserve leaders advocating for their integration into the financial system.
- New regulations allow US banks to offer stablecoin services, enhancing their global influence.
- European policymakers call for strict regulations and expedited development of the digital euro to counteract these threats.
This situation reflects ongoing financial power dynamics, as Europe aims to retain monetary control amid increasing US influence through crypto systems.