American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

ECB’s digital euro vs. Trump’s dollar-backed stablecoins: who will prevail?

by admin January 25, 2025
January 25, 2025
ECB’s digital euro vs. Trump’s dollar-backed stablecoins: who will prevail?

The European Central Bank (ECB) has highlighted the need for a digital euro to address competition from dollar-backed stablecoins promoted by US President Donald Trump.

ECB board member Piero Cipollone underscored this point during a conference in Frankfurt, as reported by Reuters.

Trump’s stablecoin push

Trump recently issued an executive order outlining his vision for cryptocurrency, which includes promoting the global use of “lawful and legitimate dollar-backed stablecoins.”

Stablecoins are cryptocurrencies typically pegged to traditional currencies like the US dollar.

According to Trump, this strategy aims to bolster stablecoin adoption on a global scale, potentially reshaping the financial landscape.

ECB’s response to stablecoins

Cipollone argued that the promotion of stablecoins could further disintermediate banks, leading to reduced fees and a loss of customers.

This, he said, strengthens the case for the ECB to accelerate its plans for a digital euro.

“The key word here [in Trump’s executive order] is worldwide,” Cipollone stated.

“This solution further disintermediates banks as they lose fees and clients. That’s why we need a digital euro.”

How digital euro and stablecoins differ

Stablecoins function similarly to money market funds, offering exposure to short-term interest rates in currencies like the US dollar.

They are often used for cross-border payments and decentralized finance (DeFi) transactions.

In contrast, a digital euro would serve as an online wallet guaranteed by the ECB.

While banks or other companies would operate it, the wallet would allow individuals, including those without bank accounts, to make payments securely.

To address concerns over potential financial disruption, the ECB would likely impose caps on holdings, limiting them to a few thousand euros and ensuring they are non-interest bearing.

Eurozone banks’ concerns

Eurozone banks have raised concerns about the potential impact of a digital euro on their liquidity.

A shift of customer funds to ECB-backed wallets could lead to reduced deposits and impact bank operations.

Despite these concerns, the ECB continues to explore the technical and operational aspects of a digital euro.

A final decision on its rollout will only occur after European lawmakers approve the necessary legislation.

Trump’s stance on CBDCs

In addition to promoting stablecoins, Trump’s executive order prohibits the Federal Reserve from issuing its own central bank digital currency (CBDC).

This sets the U.S. apart from countries like China, which has been advancing its digital yuan project.

The debate over digital currencies reflects broader questions about the future of money, financial inclusion, and the balance of power between traditional banks and emerging technologies.

While stablecoins offer a market-driven alternative, a digital euro could ensure greater regulatory oversight and financial stability within the eurozone.

As both strategies unfold, the global financial ecosystem may witness significant shifts in how currencies are used and managed.

The post ECB’s digital euro vs. Trump’s dollar-backed stablecoins: who will prevail? appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Retire rich with these blue-chip dividend ETFs
next post
Top 4 hotel stocks to buy as the travel boom remains

Related Posts

Next joins £1 billion profit club as sales...

March 27, 2025

Hubspot stock price slowly forms a bullish pattern:...

December 22, 2024

Europe markets open: stocks gain, tracking global rally;...

April 25, 2025

Here’s why private equity stocks like Blackstone, KKR,...

June 3, 2025

Chinese retail giants Shein and Temu see US...

February 12, 2025

‘The Great Stay’: Layoffs, unemployment remain low as...

March 8, 2024

Japan’s passport ranks No. 2 globally, yet only...

February 22, 2025

Uber reportedly explored buying Expedia: here’s why it...

October 17, 2024

India’s Sensex tumbles 1,000 points as bears dominate;...

November 28, 2024

Trump establishes ‘digital Fort Knox’ with US strategic...

March 7, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Interview: Strategic location gives Brazil Potash cost advantage in domestic fertiliser market, says CEO Matt Simpson

      June 1, 2025
    • Canada’s Q1 GDP expands by 2.2%, driven by exports spike ahead of potential US tariffs

      June 1, 2025
    • President Trump to host farewell for Elon Musk as DOGE leader steps away

      June 1, 2025
    • UK’s digital banks face divergent fortunes: Starling stumbles, Monzo and Revolut soars

      June 1, 2025
    • Trump wants Apple to shift iPhone production from India to the US: here’s what it means

      May 18, 2025

    Categories

    • Business (3,022)
    • Investing (2,459)
    • Latest News (1,994)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved