Trump’s crypto plan will speed up digital euro By Francesco Canepa and Balazs Koranyi
The European Central Bank (ECB) is looking to accelerate the process of introducing a digital euro, and the recent support of cryptocurrencies by U.S. President Donald Trump could play a crucial role in this effort. According to ECB board member Piero Cipollone, Trump’s endorsement of cryptocurrencies tied to the U.S. dollar, particularly stablecoins, could give the digital euro project the push it needs in terms of legislative backing.
Cipollone explained that the ECB’s digital currency initiative – essentially an online wallet guaranteed by the central bank – is, in part, aimed at offering an alternative to dominant U.S.-based payment systems such as Visa and PayPal. Trump’s support for stablecoins pegged to the U.S. dollar could further strengthen the dominance of U.S. financial tools globally, which Cipollone sees as a catalyst to intensify efforts for the digital euro.
The European Commission first presented legislation for the digital euro in June 2023. However, progress has been slow, with some lawmakers and bankers expressing skepticism about the initiative. Despite this, Cipollone noted that political awareness of the issue is growing, and there is hope that the EU Parliament and Council will finalize their work on the digital euro legislation by the summer. If successful, this would set the stage for negotiations with the European Commission and potentially allow the new rules to be finalized by November. At that time, ECB policymakers are expected to vote on whether to officially launch the digital euro.
Cipollone acknowledged the complexity of political processes but emphasized the urgency of the matter, stressing that the sooner the legislation is in place, the better. EU lawmaker Markus Ferber suggested that the best-case scenario would see a report from Parliament ready by the summer, although full legislation might take longer.
Stablecoins, like money market funds, are seen as offering exposure to short-term interest rates in an official currency, but their potential use as a means of payment raises concerns. Cipollone voiced worries that the increasing spread of U.S. stablecoins could divert deposits away from European banks, further eroding the role of traditional banking institutions in the European Union.
The ECB is keen to position the digital euro as a solution to these issues, ensuring that the EU has a digital currency that can compete with U.S.-backed payment systems while maintaining the sovereignty and stability of its financial systems.
EXCERPT
Trump’s crypto plan will speed up digital euro By Francesco Canepa and Balazs Koranyi February 6, 20257:53 AM GMT+1Updated 2 hours ago Item 1 of 2 The Euro sign by German artist Ottmar Hoerl is photographed after “Caiz development” company announced its sponsorship for the conversation of the landmark in Frankfurt, Germany, September 27, 2022. REUTERS/Kai Pfaffenbach/File Photo [1/2]The Euro sign by German artist Ottmar Hoerl is photographed after “Caiz development” company announced its sponsorship for the conversation of the landmark in Frankfurt, Germany, September 27, 2022. REUTERS/Kai Pfaffenbach/File Photo Purchase Licensing Rights , opens new tab Summary Companies Sees US stablecoins as ‘worrisome’ for EU banks FRANKFURT, Feb 6 (Reuters) – The European Central Bank hopes U.S. President Donald Trump’s plan to support cryptocurrencies pegged to the U.S. dollar will speed up legislative backing for the digital euro, ECB board member Piero Cipollone told Reuters. The ECB has presented its digital currency – essentially an online wallet guaranteed by the central bank – in part as an electronic means of payment that does not rely on dominant U.S. providers such as Visa (V.N) , opens new tab and PayPal (PYPL.O) , opens new tab. Advertisement · Scroll to continue Cipollone said Trump’s support for globally available stablecoins tied to the dollar would help create yet another U.S.-made payment tool and added urgency to the digital euro project. The European Commission proposed digital euro legislation in June 2023 but not much has happened since amid scepticism from some lawmakers and bankers. “The political world is becoming more alert to this,” Cipollone said in an interview on Wednesday. “And it’s possible that we will see an acceleration in the process.” Advertisement · Scroll to continue Cipollone hoped the EU’s Parliament and Council would wrap up work on the digital euro legislation before the summer, paving the way for negotiations with the Commission. This would leave room for the new rules to be finalised by November, when ECB policymakers are set to vote on whether or not to launch the digital currency. “Political processes are complex and there are many things on the table,” Cipollone said. “Obviously the sooner the better, but we fully understand their needs.” Asked by Reuters about this timeline, EU lawmaker Markus Ferber said Parliament may at best have a report ready by the summer. Like money market funds, stablecoins offer exposure to short-term interest rates in an official currency but they can also be used to make payments. Cipollone said the spread of U.S. stablecoins as a means of payment was “worrisome” because it threatened to divert deposits away from European banks.
ChatGPT said:
The European Central Bank (ECB) is looking to accelerate the process of introducing a digital euro, and the recent support of cryptocurrencies by U.S. President Donald Trump could play a crucial role in this effort. According to ECB board member Piero Cipollone, Trump’s endorsement of cryptocurrencies tied to the U.S. dollar, particularly stablecoins, could give the digital euro project the push it needs in terms of legislative backing.
Cipollone explained that the ECB’s digital currency initiative – essentially an online wallet guaranteed by the central bank – is, in part, aimed at offering an alternative to dominant U.S.-based payment systems such as Visa and PayPal. Trump’s support for stablecoins pegged to the U.S. dollar could further strengthen the dominance of U.S. financial tools globally, which Cipollone sees as a catalyst to intensify efforts for the digital euro.
The European Commission first presented legislation for the digital euro in June 2023. However, progress has been slow, with some lawmakers and bankers expressing skepticism about the initiative. Despite this, Cipollone noted that political awareness of the issue is growing, and there is hope that the EU Parliament and Council will finalize their work on the digital euro legislation by the summer. If successful, this would set the stage for negotiations with the European Commission and potentially allow the new rules to be finalized by November. At that time, ECB policymakers are expected to vote on whether to officially launch the digital euro.
Cipollone acknowledged the complexity of political processes but emphasized the urgency of the matter, stressing that the sooner the legislation is in place, the better. EU lawmaker Markus Ferber suggested that the best-case scenario would see a report from Parliament ready by the summer, although full legislation might take longer.
Stablecoins, like money market funds, are seen as offering exposure to short-term interest rates in an official currency, but their potential use as a means of payment raises concerns. Cipollone voiced worries that the increasing spread of U.S. stablecoins could divert deposits away from European banks, further eroding the role of traditional banking institutions in the European Union.
The ECB is keen to position the digital euro as a solution to these issues, ensuring that the EU has a digital currency that can compete with U.S.-backed payment systems while maintaining the sovereignty and stability of its financial systems.
Siurce: Reuters
