A high-ranking official from the European Central Bank (ECB) has expressed concerns that President Donald Trump’s determined drive for cryptocurrency adoption may lead to financial instability. They urged EU policymakers to enhance their regulatory framework to address any potential repercussions.
François Villeroy de Galhau, the Governor of the Bank of France and a member of the ECB’s Governing Council, shared in an interview that the US could be “sinning through negligence” by pursuing crypto-friendly policies without sufficient regulatory oversight.
He emphasized that by “promoting crypto assets and non-bank financing,” the US is “planting the seeds of forthcoming turmoil,” noting that financial crises have a history of often beginning in the United States and spreading globally.
Villeroy de Galhau’s remarks indicate an increasing concern among European regulators regarding Trump’s shift toward digital assets. Since his return to office, the administration has pursued various initiatives aimed at incorporating cryptocurrency into the financial landscape.
These initiatives include an executive order to establish a Strategic Bitcoin Reserve, the creation of a Presidential Working Group focused on digital assets, and legislative reforms aimed at rolling back restrictions on crypto banking that were implemented during the Biden administration.
### ECB’s Increasing Critique
The ECB has consistently warned about the potential dangers associated with favorable crypto economic policies, highlighting that the absence of regulatory protections could lead to market volatility. In a report from the previous year, the central bank criticized the speculative nature of cryptocurrencies, deeming them as “highly volatile and unsuitable as a dependable currency.”
ECB President Christine Lagarde has frequently voiced her concerns about the risks tied to large-scale cryptocurrency adoption, previously labeling Bitcoin as “a speculative asset with no intrinsic value” and stressing that unregulated digital assets may threaten financial stability.
Earlier this year, the ECB initiated a two-phased project aimed at developing blockchain-based settlement systems, indicating its preference for a regulated, state-backed approach to digital assets. This initiative includes the establishment of a central bank digital currency (CBDC) known as the digital euro, which the ECB argues would offer a safer alternative compared to privately issued cryptocurrencies.
Despite Trump’s pro-cryptocurrency stance, financial markets have experienced fluctuations. Bitcoin recently dipped below $80,000, a decline of over 25% from its peak of $109,000 in January, amid investor uncertainty regarding US economic policies. The stock market has also faced challenges, with the S&P 500 falling more than 10% from its peak in February after Trump threatened to impose 200% tariffs on European spirits.
### Europe Preparing for Economic Consequences
Villeroy de Galhau urged European leaders to “bolster their negotiating stance” against the US, arguing that Trump’s economic strategies are rooted in a “misguided vision” of the global economy as a zero-sum scenario. He cautioned against complacency in light of Washington’s evolving financial policies.
As the ECB advances its digital payment systems, European regulators seem to be positioning themselves as a counterbalance to the US’s deregulated approach. This divide underscores a significant clash in financial ideologies — a clash that could influence the trajectory of global markets.