ESM chief warns Trump’s crypto policies pose risk to EU monetary sovereignty

European Stability Mechanism (ESM) managing director Pierre Gramegna said that President Donald Trump’s administration’s favorable stance toward crypto, particularly dollar-backed stablecoins, could challenge Europe’s monetary autonomy, Bloomberg News reported on March 10.

Gramegna warned that the changing US stance could encourage both foreign and American technology firms to pursue large-scale payment solutions using dollar-denominated stablecoins. 

He added:

“And if this were to be successful, it could affect the euro area’s monetary sovereignty and financial stability.”

US dollar-pegged stablecoins have a combined market cap of over $224 billion and play a significant role in global finance, moving over $4 trillion over the past 30 days, according to Artemis data. 

Accelerating the digital euro

In response to these concerns, the ESM supports the European Central Bank’s (ECB) accelerated efforts to develop and implement a digital euro. 

It aligns with ECB board member Piero Cipollone’s remarks from Jan. 24, when he said that the central bank must accelerate the push for the digital euro to respond to Trump’s push to promote dollar-backed stablecoins globally.

Cipollone’s remarks followed the first crypto-related executive order signed by the US President on Jan. 23. This order prohibited federal agencies from pursuing a central bank digital currency (CBDC) and laid a framework to bolster the adoption of dollar-backed stablecoins worldwide.

Gramegna highlighted the urgency of the initiative, stating that a European CBDC is essential to maintaining financial autonomy and stability in the region. The decision on the digital euro will be a key moment in Europe’s strategy to navigate the evolving global digital asset landscape.

Trump executive orders

Last week, Trump’s administration deepened its efforts in the crypto industry by signing a second executive order establishing a Strategic Bitcoin (BTC) Reserve and a Digital Asset Stockpile.

The vaults will hold crypto seized in legal proceedings and will be managed by the Treasury. The reserve will serve as a long-term holding, with the Treasury directed to accumulate more Bitcoin in a budget-neutral manner.

Trump has also signalled that stablecoins will be a fundamental part of America’s economic plan to ensure the US dollar maintains its dominance as the global reserve currency.

The ECB, in contrast, has remained firm in its rejection of Bitcoin as a reserve asset. During a speech to the central bank members, ECB President Christine Lagarde said that reserves have to be liquid, secure, and safe and should not be “plagued by the suspicion of money laundering or other criminal activities.”

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