US Heading for ‘Future Upheaval’ Due to Its Embrace of Crypto, Says ECB Governing Council Member: Report
The Trump Administration’s support for cryptocurrency is causing concern among global financial stability, according to Francois Villeroy de Galhau, a member of the European Central Bank’s Governing Council.
In an interview with the French news outlet La Tribune Dimanche, Villeroy de Galhau warned that the US may be neglecting the risks associated with promoting crypto-assets and non-bank finance, which could potentially lead to future financial crises that originate in the US and spread worldwide.
Villeroy de Galhau, who also serves as the governor of France’s central bank, emphasized that Europe is better equipped to supervise cryptocurrencies and mitigate the risks associated with them. The European Union’s regulatory framework is seen as more robust compared to the US approach.
The ECB has been advocating for the development of a digital euro as a response to President Trump’s endorsement of dollar-pegged stablecoins issued by the private sector. ECB board member Piero Cipollone expressed concerns that Trump’s executive order on crypto could lead to a reduction in bank activity as people shift towards alternative digital assets.
However, the ECB’s digital euro initiative faced criticism following a recent technical issue with the TARGET2 payment system, the ECB’s real-time gross settlement system. The outage in late February disrupted payment processing for several hours, prompting criticism from German MP Markus Ferber, who questioned the ECB’s ability to manage a digital euro if it struggles with day-to-day operations.
Despite the challenges, the ECB remains committed to advancing its digital euro project as a response to the evolving landscape of global finance and the growing influence of cryptocurrencies.
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