US Stablecoins More Harmful Than Tariffs, Says Italy’s Finance Minister
Italy’s Economy and Finance Minister, Giancarlo Giorgetti, issued a stark warning over the growing influence of US dollar-backed stablecoins across Europe. Speaking at an event in Milan, Giorgetti stated that the assets pose a bigger risk to European economic stability than United States tariffs.
He cautioned that while tariffs get the headlines, stablecoins present a more subtle but more insidious threat to reducing the euro’s role in cross-border payments.
Stablecoins Cut Into Euro’s Cross-Border Role
For Giorgetti, dollar-backed stablecoins enable Europeans to conduct global transactions in US dollars without needing American bank accounts. This makes them good alternatives and could cut into the euro’s role in the international financial system.
He dubbed the trend “even more dangerous” than protectionist trade policy, and he cautioned that monetary sovereignty will be lost if Europe fails to act.
EU Called Upon to Bolster the Euro
In a bid to make this challenge an opportunity, Giorgetti emphasized the relevance of Europe in reinforcing the international role of the euro. One of the key aspects of this strategy, in his view, is the introduction of the digital euro by the European Central Bank (ECB), which would offer a domestic solution to foreign-backed stablecoins.
US Lawmakers Advance Stablecoin Regulations
Across the Atlantic, US lawmakers are busy shaping regulations themselves. On April 2, the House Financial Services Committee voted to approve the STABLE Act, which requires issuers to disclose how stablecoins are backed.
The GENIUS Act also proposes strict regulation, requiring one-to-one reserves, anti-money laundering and consumer protection.
ECB Official Spouts in Support of Digital Euro
Quoting Giorgetti, ECB Executive Board member Piero Cipollone called for prompt action to be taken. In an opinion piece published on April 8, Cipollone asserted the need for a digital euro in a bid to protect monetary sovereignty and reduce reliance on dollar-denominated digital money.
