Isabella García
European Central Bank (ECB) board member Piero Cipollone emphasized the urgency of developing a digital euro to counter the rising influence of U.S.-backed stablecoins promoted by President Donald Trump. Speaking at a financial policy meeting in Frankfurt, Cipollone warned of the potential disruption Trump’s latest executive order could bring to global financial systems.
President Trump recently signed an executive order aiming to solidify U.S. dominance in digital financial technologies. The order highlights the importance of supporting the sovereignty of the U.S. dollar by fostering the growth of lawful and legitimate dollar-backed stablecoins on a global scale.
Trump’s move underscores his administration’s strategy to strengthen the dollar’s influence worldwide, which Cipollone believes poses a direct challenge to traditional banking systems in Europe.
At the 13th Conference on the Future of the Financial Sector, hosted by the Institute for Law and Finance, Cipollone highlighted the risks of falling behind. “The key word in Trump’s executive order is ‘worldwide,’” he said, pointing out that the push for stablecoins could disintermediate traditional banks.
“Banks risk losing fees and clients. This is why we urgently need a digital euro,” Cipollone stated. He urged the ECB to accelerate its digital currency initiatives to ensure Europe maintains its financial autonomy.
What Is a Digital Euro?
A digital euro would function as an online wallet managed by private financial institutions under the oversight of the ECB. This system would allow users, even those without traditional bank accounts, to make secure payments.
To ensure stability, the ECB envisions capping individual holdings at a few thousand euros and restricting the accumulation of interest on these balances.
The digital euro project is still in its testing phase, and its launch depends on the approval of necessary legislation by EU lawmakers.
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Contrasting Approaches: U.S. vs. Europe
While the ECB explores the development of a central bank digital currency, President Trump’s executive order explicitly bans the Federal Reserve from issuing its own central bank digital currency (CBDC). Instead, his administration is focused on promoting private, dollar-backed stablecoins, reinforcing the dominance of the U.S. dollar.
This divergence in policy highlights differing priorities: the U.S. aims to leverage stablecoins to bolster the dollar’s global influence, while Europe seeks to safeguard its financial independence through the creation of a digital euro.
As global finance increasingly embraces digital innovation, the competition between stablecoins and central bank digital currencies is intensifying. For Europe, the development of a digital euro represents more than technological progress—it’s a strategic imperative to ensure economic sovereignty and counterbalance U.S.-led initiatives in the digital financial landscape.
Cipollone’s remarks underline the importance of swift action by the ECB to prepare for the next era of global finance. The race for dominance in digital currencies is underway, and Europe’s response could define its role in the evolving financial ecosystem.
