On March 10, 2025, Pierre Gramegna, the managing director of the European Stability Mechanism, voiced his apprehensions about the potential threats posed by the U.S. administration’s pro-cryptocurrency stance and the influence of USD-denominated stablecoins on the financial stability and sovereignty of the EU.
Gramegna’s recent statements regarding the implications of U.S. crypto policy for the eurozone economy are linked to the saga surrounding Facebook’s Libra/Diem initiative. The project ultimately failed to materialize amidst legal challenges and a general wariness about cryptocurrencies from regulatory bodies.
During a Eurogroup press conference, Gramegna remarked that large technology firms might work towards launching their own cryptocurrencies, similar to Facebook’s efforts from 2019 to 2022. With the current administration’s openly pro-crypto position, which links the advocacy of cryptocurrencies with global leadership, it is possible that we could see renewed attempts akin to Libra/Diem.
Gramegna was quoted saying:
The current U.S. administration’s viewpoint on this matter has shifted: it is now supportive of cryptocurrencies, particularly dollar-denominated stablecoins, which raises significant concerns in Europe. This could rekindle plans by foreign and U.S. tech giants to introduce large-scale payment solutions reliant on dollar-backed stablecoins.
Is the threat real?
Gramegna warned that payment systems launched by messaging or social media platforms, potentially reaching millions or even billions of users, could jeopardize the financial stability and sovereignty of the EU.
As of November 2024, approximately 260 million users were engaging with Facebook daily. By March 2025, the EU’s population had surpassed 744 million, suggesting that nearly 35% of the EU’s population interacts with Facebook each day, with even higher daily engagement on Instagram.
It’s understandable that the prospect of enabling these users to make instant cross-border payments through a U.S.-registered company could be considered destabilizing. If many Europeans find it easier to transact using social media applications rather than traditional banking methods, these new payment systems could divert a significant amount of liquidity away from the euro and into the U.S. economy. Moreover, any payment system introduced by a tech giant could raise serious centralization issues, posing potential risks in terms of technical security.
Do such initiatives pose a genuine existential threat to the eurozone? Theoretically, yes — however, in practice, European countries may impede the rollout of these payment systems, as they did when Facebook attempted to launch Libra.
The sentiments expressed in 2019 were quite similar. European leaders insisted on blocking Facebook’s Libra to safeguard financial sovereignty. At that time, then-French finance minister Bruno Le Maire remarked that Libra “poses a systemic risk given its potential user base of two billion.” He cautioned that any disruptions in Libra’s operations or issues with reserve management could have dire consequences, emphasizing, “Concerns about Libra are serious. Therefore, I must clearly state: under these conditions, we cannot authorize the development of Libra in Europe.”
While the U.S. might back the next iteration of “Libra,” will it be able to navigate the regulatory hurdles erected by EU protectionists? Even if Europe succeeds in shutting down such initiatives, the implementation of similar payment systems in other regions may broaden U.S. influence while constricting that of its competitors, including Europe.
Potential solution
The primary and arguably the only viable alternative to popular American stablecoins appears to be European CBDCs. The European Central Bank has been engaged in the digital euro initiative since 2020. Gramegna firmly links European autonomy to the launch of the EU CBDC, labeling it an urgent priority and proclaiming, “The Digital Euro is more necessary today than ever.”
Furthermore, Gramegna suggested that it may be time to revisit the MiCA directive, suggesting it could be crucial in countering some of the effects we’ve discussed. The aim is for the European CBDC to replace payment systems like Visa and PayPal, thereby reducing reliance on U.S. influence.
Europe could respond by promoting euro-denominated stablecoins, but current trends indicate a challenging landscape. Tether’s USDT and Coinbase’s USDC currently dominate the stablecoin market, while Euro-pegged stablecoins lag far behind in both market capitalization and demand, rendering them almost non-competitive. According to Coinmarketcap, the first eleven largest stablecoins by market cap are all tied to the U.S. dollar, with the 12th being Stasis Euro, which ranks 258th overall among cryptocurrencies. Only EURC, Tether Euro, and Euro Vertible make the list of the top 30 stablecoins by market cap, highlighting the overwhelming dominance of U.S.-denominated coins.
This does not imply that Europe cannot utilize Euro-pegged stablecoins, but it does suggest that the starting conditions are less than favorable. In contrast, the situation regarding the digital euro is promising. With the U.S. inhibiting the development of CBDCs, Europe has an opportunity to position itself as a front-runner in the global adoption of CBDCs.