A top European Central Bank (ECB) official is sounding the alarm about the potential for cryptocurrency to destabilize the US, and by extension, the global economy.
US Crypto Policies Risk Global Instability
Francois Villeroy de Galhau, a member of the ECB’s Governing Council and governor of the Bank of France, warned that the US’s pro-crypto stance is a recipe for disaster. He told a French news outlet that the US is “risking a major mistake” by embracing crypto and non-bank finance. He believes this approach could trigger another global financial crisis, similar to past crises originating in the US.
Europe’s Different Approach
Villeroy de Galhau contrasted the US approach with Europe’s, arguing that the EU’s stricter crypto regulations mean Europe is less vulnerable to a banking crisis. The ECB is actively promoting a digital euro as a counter to the US’s reliance on private stablecoins.
Digital Euro and Recent Setbacks
The ECB’s push for a digital euro has faced some headwinds recently. A major outage in the ECB’s payment system in February raised concerns about the bank’s ability to handle a digital currency. Critics, like German MP Markus Ferber, questioned the ECB’s credibility in light of this incident, suggesting it casts doubt on their ability to manage a digital euro successfully. Earlier, an ECB board member had highlighted that the US’s crypto policies could drive customers away from traditional banks, further strengthening the case for a digital euro.
