Nikolas Sargeant
European Central Bank official Francois Villeroy de Galhau warns that America's pro-crypto stance may lead to global financial instability.
European Concerns Rise as US Embraces Digital Assets
The United States' increasingly favorable approach to cryptocurrencies and non-bank financial services could become the catalyst for the next global financial crisis, according to European Central Bank (ECB) Governing Council member Francois Villeroy de Galhau. In a recent interview with French weekly La Tribune Dimanche, Villeroy expressed serious concerns about America's regulatory direction.
"The United States risks sinning through negligence," Villeroy stated, as reported by Bloomberg. "Financial crises often originate in the United States and spread to the rest of the world. By encouraging crypto-assets and non-bank finance, the American administration is sowing the seeds of future upheavals."
This warning comes amid a significant shift in US cryptocurrency policy under President Donald Trump's administration. Following years of regulatory uncertainty, the Securities and Exchange Commission (SEC) has adopted a more permissive stance, dropping multiple lawsuits against crypto companies after former Chair Gary Gensler's resignation. Trump has also signed an executive order establishing a Strategic Bitcoin Reserve and calling for additional digital asset stockpiles.
Digital Euro Gains Urgency in Response to US Crypto Dominance
European officials are increasingly concerned about the geopolitical implications of America's crypto embrace. Pierre Gramegna, managing director of the European Stability Mechanism, recently warned that growing US support for cryptocurrencies could undermine Europe's monetary sovereignty. He argued that this development strengthens the case for a digital euro as a counterbalance to America's expanding influence in global finance.
Gramegna further cautioned that the evolving US position on digital currencies might encourage both foreign and American tech companies to develop large-scale payment solutions using dollar-backed stablecoins. Such developments could potentially weaken the euro's role in international transactions and increase global dependence on the US dollar through digital assets.
Regulatory Philosophies Diverge as Tensions Mount
Villeroy emphasized the need for the euro to play a stronger international role, highlighting the importance of building a unified savings and investment market that would attract global investors and strengthen confidence in the European currency.
As Washington increasingly positions digital assets as a cornerstone of its financial future, the ECB maintains a cautious approach. The contrasting regulatory philosophies highlight a widening divide between American and European perspectives on cryptocurrency governance, with European officials warning that unchecked expansion could trigger the next worldwide financial disruption.
