Insightful Word
  • Investing
  • Stock
  • Economy
  • Politics
  • Investing
  • Stock
  • Economy
  • Politics
No Result
View All Result
Insightful Word
No Result
View All Result
Home Politics

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

admin by admin
January 25, 2025
in Politics
0
ECB’s digital euro vs. Trump’s dollar-backed stablecoins: who will prevail?
0
SHARES
2
VIEWS
Share on FacebookShare on Twitter

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

Previous Post

Venezuela faces oil sanctions under new Trump term: what to expect?

Next Post

S&P 500 slips from intraday highs as investors lock in profits after a strong week

admin

admin

Next Post
S&P 500 slips from intraday highs as investors lock in profits after a strong week

S&P 500 slips from intraday highs as investors lock in profits after a strong week

Trending News

What extended conflict between India and Pakistan could cost their economies

What extended conflict between India and Pakistan could cost their economies

May 11, 2025
China spares major French cognac makers from tariffs in brandy dispute

China spares major French cognac makers from tariffs in brandy dispute

July 4, 2025
Long STX: Seagate Technology Maintains Uptrend, Bullish Rejection Pattern Signals Target Near Major Resistance

Long STX: Seagate Technology Maintains Uptrend, Bullish Rejection Pattern Signals Target Near Major Resistance

October 14, 2024
Subscribe to Insightful Word


    Recent News

    Dow futures soar 250 points today: 5 things to know before Wall Street opens

    Dow futures soar 250 points today: 5 things to know before Wall Street opens

    August 7, 2025
    Affirm stock price is rising: is it a buy before earnings?

    Affirm stock price is rising: is it a buy before earnings?

    August 7, 2025
    Intel stock plunges sharply after Trump calls on CEO to resign: here’s why rebound may take time

    Intel stock plunges sharply after Trump calls on CEO to resign: here’s why rebound may take time

    August 7, 2025
    Goldman Sachs boosts Nvidia price target to $200 ahead of Q2 earnings

    Goldman Sachs boosts Nvidia price target to $200 ahead of Q2 earnings

    August 7, 2025

    Recent News

    Dow futures soar 250 points today: 5 things to know before Wall Street opens

    Dow futures soar 250 points today: 5 things to know before Wall Street opens

    August 7, 2025
    Affirm stock price is rising: is it a buy before earnings?

    Affirm stock price is rising: is it a buy before earnings?

    August 7, 2025

    Latest News

    • Dow futures soar 250 points today: 5 things to know before Wall Street opens
    • Affirm stock price is rising: is it a buy before earnings?
    • Intel stock plunges sharply after Trump calls on CEO to resign: here’s why rebound may take time

    About Insightful Word

    • Contacts
    • Cookie Notice
    • Privacy Policy
    • Terms of Service
    • Trading tools
    • Contacts
    • Cookie Notice
    • Privacy Policy
    • Terms of Service
    • Trading tools

    Copyright © 2025 Insightfulword.com. All Rights Reserved.

    No Result
    View All Result
    • Investing
    • Stock
    • Economy
    • Politics

    Copyright © 2025 Insightfulword.com. All Rights Reserved.