Francois Villeroy de Galhau, the governor of the Banque de France and a member of the European Central Bank Governing Council, asserts that U.S. President Donald Trump is making a significant error by endorsing cryptocurrencies.
In a recent interview with a French publication, Villeroy de Galhau expressed concerns that the U.S. is potentially setting itself up for the next financial crisis by adopting cryptocurrencies and non-bank financial systems. He remarked, “The United States risks erring through negligence,” adding:
“Financial crises often originate in the United States and ripple out to the rest of the globe. By promoting crypto-assets and non-bank finance, the American administration is planting the seeds for future turmoil.”
Historically, three of the five most significant financial crises have originated in the U.S.: The Great Depression, triggered by the Wall Street crash of 1929; the OPEC Oil Price Shock of 1973, when oil exports to the U.S. were halted; and the Great Recession, which resulted from the collapse of the housing market bubble in the U.S.
Villeroy de Galhau has been vocal in his criticism of Trump’s policies
Villeroy de Galhau was among the first economists to express his unease regarding Trump and his policies, even prior to Trump’s inauguration in January. On January 15, he stated:
“What we sometimes hear in the United States about the insufficient regulation of non-bank entities, various funds, or crypto-assets is something that poses risks to financial stability.”
Earlier this week, he characterized Trump’s trade wars and economic strategies as a “tragedy for the American economy.”
Villeroy de Galhau’s opinions are not isolated; the head of Germany’s central bank, Joachim Nagel, recently referred to these economic policies as “economic policy from a horror show.”
Deregulation in the U.S. is “perilous”
Since Trump took office, there has been a noticeable change in the administration’s approach to digital assets. For example, the Securities and Exchange Commission (SEC) has decided to drop significant cases against several crypto exchanges, including Coinbase.
Additionally, Trump has initiated a crypto strategic reserve that allows the U.S. to accumulate tokens like Bitcoin (BTC) and Ethereum (ETH).
Villeroy de Galhau contends that the current wave of deregulation in the U.S. is “perilous.”