Warning signs are flashing for the euro as dollar-based stablecoins become a serious threat to the European currency. This alarming assessment comes from Giancarlo Giorgetti, Italy’s Minister of Economy, who believes the growing popularity of dollar-linked digital assets could have catastrophic consequences for the eurozone.
According to Giorgetti, EU leaders must urgently address the proliferation of dollar-pegged stablecoins, which he considers a greater threat to the euro than Donald Trump’s tariff wars. He argues that these stablecoins are increasingly used in cross-border payments, posing risks that European authorities can no longer ignore.
Giorgetti also expressed concern over the fragmentation of the EU’s payments industry, urging greater efforts to strengthen the euro’s international role. "The general focus these days is on the impact of trade tariffs. However, even more dangerous is the new US policy on cryptocurrencies and in particular that on dollar-denominated stablecoins," Giorgetti said.
The Italian minister warns that Europeans are already using these stablecoins as a risk-free savings tool and as a convenient method for cross-border payments without needing a US bank account.
However, the European Central Bank (ECB) is not standing idle. It is actively developing a digital euro, a move seen as critical to shielding the fiat system from the growing influence of stablecoins. The proposed plan would allow EU residents to hold digital euro accounts directly with the ECB.
"The digital euro will be essential to minimize the need for European citizens to resort to foreign solutions to access such a basic service as payment," Giorgetti said.
Nevertheless, the project has met resistance from European commercial banks, which are concerned about the potential outflow of customer deposits if users migrate to ECB-backed digital accounts.
