The Bank of Italy has issued a formal warning about the potential risks to global financial stability that come with the increasing adoption of cryptocurrencies in the United States. The central bank highlighted this concern in its biannual financial stability report, which focused on the vulnerability associated with volatile digital assets and their interconnectedness with traditional finance markets. The report cited the recent surge in cryptocurrency prices, particularly those linked to high volatility, as a potential threat both for investors and for global financial stability. President Trump’s pro-crypto policies and subsequent efforts to regulate crypto in the US have contributed to this rise. The Bank of Italy specifically flagged concerns regarding dollar-pegged stablecoins, which are largely backed by short-term U.S. Treasury securities. If these assets face challenges, the need for investors to repay their tokens could trigger a domino effect, leading to forced sales of reserve assets and potentially destabilizing both US government bonds and global finance.