The prominence of US dollar-pegged stablecoins, which constitute 97% of the global stablecoin market, has intensified concerns within the European Union regarding President Donald Trump’s strategy to enhance dollar dominance using digital financial technologies. This issue was highlighted during the 13th ILF Conference on the Future of the Financial Sector in Frankfurt, where European Central Bank (ECB) Executive Board Member Piero Cipollone discussed the implications for Europe’s financial autonomy.
Cipollone pointed out the critical need for the development of the digital euro to counterbalance the extensive influence of the US dollar within the stablecoin sector. He emphasized that the current stablecoin market valuation stands at approximately $215 billion, dominated overwhelmingly by dollar-backed assets. This scenario underscores the EU’s vulnerability in relying heavily on international payment schemes, which settle over 60% of card payments within Europe.
Moreover, the rise of mobile app payments, increasing from a 1% market share in 2019 to 9% in 2024, further stresses the need for Europe to assert its financial independence through its central bank digital currency (CBDC). Cipollone reiterated that the digital euro would ensure continued public access to central bank money and support European banks’ critical roles in the financial system.
Adding to these concerns, Trump’s recent executive order on “Strengthening American Leadership in Digital Financial Technology” seeks to promote the sovereignty of the US dollar by encouraging the growth of dollar-backed stablecoins globally. This move aligns with the Trump administration’s broader goals to maintain dollar supremacy in the evolving digital financial landscape.
Legal experts and analysts are scrutinizing the implications of this executive order. Attorney David Lesperance expressed that while the order appears to support the cryptocurrency sector, its underlying aim is to fortify US dollar hegemony worldwide. He speculated that the administration might also use this policy to inhibit the development of other countries’ CBDCs, leveraging economic pressures such as tariffs to align global financial systems more closely with US interests.
This strategic maneuver by the Trump administration poses significant challenges for the EU as it navigates its path toward enhancing financial technology and independence without succumbing to external pressures that could compromise its monetary sovereignty.
