- The European Union voiced its opinion against US President Donald Trump’s crypto support.
- The ESM and ECB have teamed up to fast-track the rollout of a digital euro.
- The price of euro has crashed massively, dropping approximately 50% of its value since its launch.
The European Union is becoming increasingly uneasy over U.S. President Donald Trump’s strong backing of digital assets, especially dollar-backed stablecoins.
European finance officials worry this shift could undermine the euro’s monetary sovereignty and disrupt financial stability, particularly as the EU struggles with a weakening currency.
Europe’s Response to Growing Crypto Threat
Pierre Gramegna, Managing Director of the European Stability Mechanism (ESM), expressed these concerns at a Eurogroup press conference on March 10. He noted the U.S. government’s supportive stance toward cryptocurrencies and stablecoins might allow American tech giants to build dominant payment systems in Europe.
“If this were to be successful, it could affect the euro area’s monetary sovereignty and financial stability,” Gramegna warned, reiterating the EU’s urgency in launching the digital euro to maintain its economic autonomy.
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The ESM, which assists EU countries during financial crises, aligned with the European Central Bank (ECB) in fast-tracking the rollout of the digital euro as a countermeasure.
Euro Weakens Under Pressure from Tariffs
As the EU plans its crypto strategy, the euro continues to decline against the U.S. dollar. Currently trading at $1.08, the euro dropped from over $1.12 in August 2024. Notably, the currency has lost roughly 50% of its value since its introduction.
The latest depreciation partly results from President Trump’s aggressive tariff policies. On March 3, Trump signed an executive order doubling tariffs on China from 10% to 20% and announced possible 25% tariffs on EU imports. These tariffs were temporarily delayed, but the threat alone has shaken European markets.
Financial analysts warn that Trump’s trade measures could further weaken the euro, as European exports become less competitive under heavier tariffs.
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With the euro facing continued pressure and the U.S. embracing crypto, some European investors might turn to Bitcoin and stablecoins as alternative stores of value. Historically, financial instability has driven capital into decentralized assets, and history could repeat itself.
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