Italy’s Finance Minister Warns of US Stablecoin Threat to Euro #ItalyFinance

Italy’s minister of economy and finance, Giancarlo Giorgetti, has expressed significant concern over the potential threat posed by US stablecoin policies to European financial stability. Speaking at an event in Milan, Giorgetti highlighted that while trade tariffs often dominate headlines, the new US policies on dollar-backed stablecoins present an even more dangerous threat. He emphasized that these crypto assets could undermine the euro’s dominance in cross-border payments, a critical aspect of European financial sovereignty.

Giorgetti pointed out that US stablecoins offer a convenient method for cross-border payments without the need for a US bank account, making them increasingly appealing to Europeans. This growing appeal, he warned, should not be underestimated as it could lead to a reduction in the euro’s usage in international transactions. He urged European Union lawmakers to take more steps to bolster the euro’s position as an international currency, suggesting that the digital euro currently under development by the European Central Bank (ECB) will be essential in minimizing the need for Europeans to resort to foreign solutions.

In the United States, stablecoin regulation remains fragmented, with multiple agencies applying existing laws to regulate these digital assets. However, lawmakers are actively working to implement changes. On April 2, the US House Financial Services Committee passed the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act. This bill, introduced on February 6 by Committee Chair French Hill and the Digital Assets Subcommittee Chair Bryan Steil, aims to ensure that stablecoin issuers provide comprehensive information on their businesses, including how their tokens are backed.

Additionally, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act has been proposed to establish rules requiring issuers to maintain reserves backed one-to-one, comply with Anti-Money Laundering (AML) laws, protect consumers, and boost dollar dominance in the global economy. The GENIUS Act still requires approval by both chambers of Congress and a presidential signature before becoming law.

ECB Executive Board member Piero Cipollone has also echoed Giorgetti’s concerns, urging European lawmakers to intensify their efforts to combat the growing popularity of US stablecoins. Cipollone suggested launching a central bank digital currency to preserve the monetary sovereignty of the eurozone. He emphasized that this move would aid in countering the threat posed by dollar-backed stablecoins to the euro’s dominance in Europe.