ECB Pushes for Digital Euro in Response to Trump’s Stablecoin Strategy

Piero Cipollone, a member of the European Central Bank (ECB) board, recently voiced concerns about the growing influence of U.S.-backed stablecoins, suggesting that the euro zone must develop its own digital currency to maintain its competitiveness.

He raised these points in the wake of U.S. President Donald Trump’s latest push to promote stablecoins pegged to the U.S. dollar.

In his executive order, Trump outlined plans to support the growth of dollar-backed stablecoins globally, a move that Cipollone believes could potentially erode the traditional banking system. He warned that the promotion of these stablecoins could shift customers away from conventional banks, diminishing their business through lower fees and reduced customer bases.

To counter this, Cipollone argues, the ECB should accelerate its efforts to introduce a digital euro, which would help keep European financial institutions relevant and safeguard the region’s financial stability.

The ECB has been testing the digital euro’s feasibility, but a final decision on its launch hinges on the approval of upcoming European legislation.

Meanwhile, Trump’s executive order also restricts the Federal Reserve from launching its own central bank digital currency (CBDC), further shaping the future of digital currencies and the balance of power in the global financial market.