The Trump Administration’s embrace of crypto is reportedly putting international financial stability at risk, says Francois Villeroy de Galhau, a member of the European Central Bank’s (ECB) Governing Council.
Villeroy de Galhau tells the French news outlet La Tribune Dimanche that the US “risks sinning through negligence,” according to Bloomberg.
“Financial crises often originate in the United States and spread to the rest of the world. By encouraging crypto-assets and non-bank finance, the American administration is sowing the seeds of future upheavals.”
The ECB official, who serves as governor of France’s central bank, also argues that Europe isn’t at risk of a banking crisis because the European Union (EU) is doing a superior job of supervising crypto.
The ECB has also been pushing for a digital euro to counter US President Donald Trump’s embrace of dollar-pegged private sector stablecoins.
ECB board member Piero Cipollone said at a conference in January that Trump’s new executive order on crypto could drive people away from banks.
“I guess the key word here (in Trump’s executive order) is worldwide. This solution, you all know, further disintermediates banks as they lose fees, they lose clients… That’s why we need a digital euro.”
However, vocal opposition to the ECB’s digital euro project swelled after the institution’s payment system crashed last month.
TARGET2 (T2), the ECB’s real-time gross settlement system, went down in late February, which prevented payments from being processed for several hours.
German MP Markus Ferber, a member of the European People’s Party, says the outage was “a blow to the ECB’s credibility.”
“People will ask legitimate questions how the ECB will be able to run a digital euro when they cannot even keep their day-to-day operations running smoothly.”
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