Italy's Minister of Economy and Finance, Giancarlo Giorgetti, recently voiced concerns about the impact of US stablecoin policies on European financial stability. In a speech at an event in Milan, Giorgetti highlighted that while trade tariffs have been grabbing headlines, the policies surrounding dollar-backed stablecoins pose a potentially more significant threat to the euro's dominance in cross-border payments.

Stablecoins are cryptocurrencies pegged to a stable asset, often a fiat currency like the US dollar. Giorgetti emphasized that these digital assets allow users to engage in cross-border transactions without needing a US bank account, making them an attractive alternative for Europeans. He urged European Union lawmakers to take proactive measures to bolster the euro's standing as an international currency in the face of this growing competition.

Giorgetti's call for action comes at a time when stablecoin regulation in the US is undergoing scrutiny and potential reform. Currently, regulatory oversight of stablecoins in the US is fragmented, with various agencies applying existing laws to govern these digital assets. However, there are efforts underway to introduce more comprehensive regulations.

One notable development is the passage of the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act by the US House Financial Services Committee. This bill, introduced by Committee Chair French Hill and Digital Assets Subcommittee Chair Bryan Steil, aims to ensure that stablecoin issuers disclose information about their operations and the backing of their tokens.

Additionally, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act proposes rules that mandate stablecoin issuers to maintain reserves on a one-to-one basis, comply with Anti-Money Laundering (AML) laws, protect consumers, and enhance the dollar's dominance in the global economy. While these bills have made progress in the legislative process, they still require approval from both chambers of Congress and the President's signature to become law.

In parallel to these developments, Piero Cipollone, an Executive Board member of the European Central Bank (ECB), echoed Giorgetti's concerns about the rising popularity of US stablecoins in Europe. Cipollone advocated for the launch of a central bank digital currency as a strategic move to safeguard the euro's monetary sovereignty and counter the threat posed by dollar-backed stablecoins.

The push for regulatory clarity and the development of a digital euro by the ECB underscore the escalating competition and geopolitical dynamics surrounding stablecoins and their potential impact on global financial systems. As policymakers navigate this evolving landscape,

Source: https://cointelegraph.com/news/us-stablecoins-dangerous-threat-to-euro-italy-minister?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound