ROME: US policy on stablecoins offers European citizens an attractive payment method for cross-border transactions which should trigger more concern than trade tariffs, Italy’s economy minister said on Tuesday.
Addressing an event in Milan on asset management, Giancarlo Giorgetti said European Union authorities should adopt further steps to boost the status of the euro as an international reference currency and complained about the fragmentation of the EU’s payment industry.
U.S. President Donald Trump has pledged to overhaul rules on cryptocurrencies and reverse a crackdown on the sector that took place under his predecessor Joe Biden.
Dollar-pegged stablecoins, which are a type of cryptocurrencies designed to maintain a constant value, have ballooned in recent years.
They now act as a key cog in the multi-trillion dollar crypto trading industry, helping move funds between different cryptocurrencies or into regular cash.
“The general focus these days is on the impact of trade tariffs. However, even more dangerous is the new U.S. policy on cryptocurrencies and in particular that on dollar-denominated stablecoins,” Giorgetti said.
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The minister argued that stablecoins would give savers the opportunity to invest in risk-free assets and a widely accepted means of payment for cross-border transactions, without any need for a banking account with U.S. banks.
“It is therefore easy to foresee their attractiveness for citizens of economies with unstable currencies, but its appeal for people of the euro zone should not be underestimated,” Giorgetti said.
To promote European sovereignty in payments and protect the role of fiat currencies against the spread of stablecoins, the European Central Bank (ECB) is working on the so-called digital euro.
The project envisages EU residents having digital euro accounts with the ECB which they can use for online payments or in shop, or to exchange money with friends thanks to the ECB partnering with EU-based payment services providers.
“The digital euro will be essential to minimise the need for European citizens to resort to foreign solutions to access such a basic service as payment,” Giorgetti said.
European banks have expressed concerns that a digital euro would empty their coffers as customers transfer some of their cash to the safety of an ECB-guaranteed wallet.
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