Europe Divided Over Crypto Threat as Trump Policies Raise Concerns

European financial authorities are currently divided over how much of a threat Donald Trump’s crypto-friendly stance poses to the Eurozone.

The European Central Bank (ECB) has sounded the alarm, arguing that Trump’s policies could disrupt the EU’s financial landscape by encouraging a surge in dollar-backed digital currencies. In their view, this could lead to cross-border financial instability and undermine Europe’s monetary independence.

On the other side of the debate, the European Commission has brushed off the ECB’s warnings, saying that the existing regulatory framework—particularly the Markets in Crypto-Assets (MiCA) legislation introduced in 2023—is robust enough to manage any fallout. The Commission even accused the central bank of misinterpreting the rules, fueling a broader institutional clash.

The core disagreement revolves around the rise of stablecoins tied to the U.S. dollar, which the ECB believes could erode the euro’s dominance. They argue that stricter controls are needed to prevent foreign-backed crypto assets from gaining a foothold in Europe. In contrast, the Commission maintains that no major regulatory overhaul is necessary.

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This debate came to a head during an April 14 meeting where EU leaders reviewed the potential consequences of growing American crypto influence. While the ECB pushed for urgent policy updates, most member states sided with the Commission, effectively downplaying the concerns.

Despite this, the ECB’s concerns haven’t come from nowhere. The institution has long advocated for a balanced evolution of both traditional finance and digital innovation within the EU. In fact, the ECB is already moving ahead with plans for a digital euro, a project aimed at preserving the region’s economic autonomy in a world increasingly influenced by U.S.-based digital currencies.

Alexander Stefanov