Amid the growing interest in stablecoins in the US, Italy’s Minister for Economy and Finance, Giancarlo Giorgetti, raised his concerns over the potential threat of dollar-pegged stablecoins to the European economy. The minister emphasized that there could be a risk to the economy, which would be worse than US President Donald Trump’s recent retaliatory tariffs.
Giorgetti came up with the comment during an event on asset management in Milan. He stated that European Union authorities should implement additional steps to bolster the role of the euro currency as an international reference currency while criticizing Europe’s fragmented payment industry.
Earlier in March, the US Congress passed two stablecoin bills — The Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act and the Guiding and Establishing National Innovation for US Stablecoins (GENIUS).
The legislation aims to establish “a comprehensive regulatory framework for the issuance and regulation of payment stablecoins in the United States,” the GENIUS Act reads.
Importantly, these US policies on stablecoins enhance a favorable payment method for Europeans for cross-border transactions. This would perhaps weaken the Euro’s status as a leading currency in Europe, as claimed by the minister.
Moreover, as stablecoins work on blockchain networks, people do not have to visit traditional financial institutions, further reducing deposits in banks and disrupting financial stability.
Recently, in a speech delivered at the annual conference of the University College Cork Economics Society, Philip R. Lane, executive board member of the European Central Bank, has specifically stressed the importance of the digital euro (Central Bank Digital Currency — CBDC) in supporting the European economy.
