"Stablecoins, more dangerous than tariffs" - Italian minister stresses the need for the creation of a digital euro
The United States' policy on stablecoins offers European citizens an attractive payment method for cross-border transactions, which should cause more concern than trade tariffs, the Italian economy minister said.
Addressing an event in Milan on asset management, Giancarlo Giorgetti said European Union authorities should take further steps to enhance the euro's status as an international reference currency and criticized the fragmentation of the EU payments industry.
US President Donald Trump has vowed to review regulations on cryptocurrencies and reverse a crackdown on the sector that was carried out under the leadership of his predecessor Joe Biden.
Dollar-pegged stablecoins, which are a type of cryptocurrency that maintains a constant value, have grown significantly in recent years. They now act as a key cog in the cryptocurrency trading industry, helping to move funds between different cryptocurrencies or into “cash.”
"The general focus these days is on the impact of trade tariffs. However, even more dangerous is the new US policy on cryptocurrencies and in particular on dollar-denominated stablecoins," Giorgetti said.
The minister argued that stablecoins would give savers the opportunity to invest in risk-free assets and a widely accepted means of payment for cross-border transactions, without the need for an account in US banks.
"It is therefore easy to foresee their attractiveness for citizens of economies with unstable currencies, but their attractiveness for people in the euro area should not be underestimated," Giorgetti said.
To promote European sovereignty in payments, the European Central Bank (ECB) is working on the creation of a digital euro.
The project envisages EU residents having digital euro accounts with the ECB, which they can use for online or in-store payments, or to exchange money with friends thanks to the ECB's partnership with EU-based payment service providers.
"The digital euro will be essential to minimize the need for European citizens to turn to foreign solutions for such a basic service as payments," Giorgetti said.
European banks have expressed concerns that a digital euro will empty their coffers as customers transfer some of their money to the safety of a central bank-guaranteed wallet.
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