President Trump’s strong support for the cryptocurrency market, particularly dollar-pegged stablecoins, could destabilize the European economy, according to a confidential ECB policy paper. The report suggests that this support may contribute to financial instability in Europe through capital flow diversion and complications for the EU’s modernization of its financial infrastructure. .
A major concern for the ECB is the rapid growth of dollar-backed stablecoins, fueled by potential U.S. legislation and regulatory clarity. These stablecoins, if left unchecked, could weaken the euro’s role in digital finance.
The report warns that Trump’s pro-crypto stance may lead to a cascade effect, potentially impacting the stability of the EU’s financial system.