US Crypto Dominance Poses Threat to Europe’s Economic Sovereignty: EU Official

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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March 11, 2025 03:05 EDT

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The Trump administration’s growing support for cryptocurrencies could undermine Europe’s monetary autonomy, strengthening the argument for a digital euro, according to a leading European policymaker.

“The US administration is favorable toward cryptocurrencies and especially dollar-denominated stablecoins, which may raise certain concerns in Europe,” said Pierre Gramegna, managing director of the European Stability Mechanism, during a press briefing in Brussels on Monday.

The shift in US policy has been dramatic. Last week, President Donald Trump signed an executive order to establish a Bitcoin reserve. He also approved a separate stockpile of other cryptocurrencies. These reserves will include digital assets seized through legal proceedings. This move signals a structured approach to integrating crypto into U.S. financial strategy.

Digital Euro Gains Traction as ECB Maintains Distance from Bitcoin

Meanwhile, the European Central Bank (ECB) remains cautious. Unlike the US, the ECB has explicitly ruled out adding Bitcoin to its monetary reserves. Instead, it has been developing a digital euro since 2021, with a final decision on its implementation expected later this year. However, the digital euro is not anticipated to roll out until 2028 or 2029.

The digital euro is envisioned as a secure, central bank-backed digital currency designed to complement physical cash and prevent excessive reliance on private or foreign digital payment solutions.

The ECB aims to ensure that the euro remains at the center of Europe’s financial system, protecting monetary sovereignty while providing citizens and businesses with a stable, government-backed alternative to cryptocurrencies and stablecoins. Additionally, the digital euro would enhance financial inclusion and reduce transaction costs across the eurozone.

ESM Calls for Urgent Digital Euro Rollout to Safeguard Europe Economy

Gramegna warned that the evolving US stance on digital currencies could reignite efforts by foreign and American tech firms to roll out large-scale payment solutions using dollar-backed stablecoins. “If this were to be successful, it could affect the euro area’s monetary sovereignty and financial stability,” he cautioned.

To counteract this risk, the ESM is backing the ECB’s efforts to accelerate the rollout of a digital euro. Ensuring the digital euro becomes a reality is critical to safeguarding Europe’s strategic autonomy, Gramegna said. “This digital euro is today more necessary than ever,” he said.