- US stablecoins bypass banks, gaining traction in Europe.
- STABLE and GENIUS Acts advance in US Congress.
- European CBDC efforts lag behind US regulatory push.
Italy’s finance chief has sounded the alarm over the rising influence of US dollar-backed stablecoins in Europe, arguing that they pose a greater threat to financial sovereignty than the trade tariffs pushed by Donald Trump.
His remarks come amid renewed European Central Bank efforts to accelerate the rollout of a digital euro, as lawmakers in Washington continue advancing legislation to regulate stablecoin issuers.
Italy warns stablecoins threaten euro dominance
Speaking in Milan on 8 April, Italian Minister of Economy and Finance Giancarlo Giorgetti said that European regulators must not overlook the long-term impact of stablecoin adoption in cross-border payments.
He argued that while former president Donald Trump’s tariff policies grabbed headlines, the structural challenge posed by US stablecoins was “more dangerous” to European monetary independence.
Giorgetti pointed out that American stablecoins, such as those issued by Circle and Tether, are giving users a way to bypass traditional banking rails.
By providing access to US dollars without the need for an American bank account, these digital assets are increasingly being used for cross-border payments within Europe.
This growing trend, he warned, risks accelerating a shift away from the euro in international commerce.
He urged the European Union to act swiftly, saying that the digital euro, currently under development by the European Central Bank, is now more critical than ever to counterbalance the expansion of foreign-backed cryptocurrencies.
Digital euro seen as key countermeasure
Giorgetti’s remarks follow a renewed push from the ECB to rally support for a central bank digital currency (CBDC) denominated in euros.
On 8 April, ECB Executive Board member Piero Cipollone published an article emphasising that a digital euro could play a central role in preserving Europe’s monetary sovereignty.
He wrote that the euro’s long-term credibility could be eroded if Europeans increasingly opt to use dollar-backed stablecoins for transactions.
The ECB has already concluded a two-year investigation phase and is now entering a preparatory phase for a possible digital euro rollout. The project is expected to take several more years before full deployment.
However, Cipollone said that without faster progress, Europe could fall behind the US in shaping the global digital currency landscape.
US Congress advances stablecoin bills
The concerns raised in Europe come as the United States continues to make progress on formalising stablecoin regulation.
On 2 April, the US House Financial Services Committee passed the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act.
The bill, introduced on 6 February, sets out rules requiring stablecoin issuers to disclose their reserves and operations.
The committee also advanced the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which mandates one-to-one reserve backing, compliance with Anti-Money Laundering (AML) rules, and consumer protections.
Both bills aim to reinforce the US dollar’s dominance while providing regulatory clarity to stablecoin providers.
However, these bills still need to pass both chambers of Congress and be signed into law by the US president. If passed, they would bring the US closer to a comprehensive framework for digital dollar assets—something the EU is still lacking in comparison.
Eurozone faces uphill task in payments modernisation
Despite regulatory momentum in the US, Europe is still catching up in the race for digital currency influence.
While MiCA (Markets in Crypto-Assets Regulation) will establish licensing requirements for stablecoin issuers within the EU starting in mid-2024, it does not yet include strong mechanisms to promote the use of the euro in decentralised finance or digital payments.
Analysts say that unless the digital euro project is fast-tracked and additional incentives are created for European users to adopt it, dollar-backed stablecoins could continue to outpace the euro in global digital transactions.
The Italian government’s latest intervention reflects growing concern among EU leaders that the window to respond may be narrowing.
