Italian finance and economy minister Giancarlo Giorgetti is warning that dollar stablecoins are a greater threat to the European economy than tariffs.
U.S. policy on stablecoins is raising alarm among European leaders. At an asset management event in Milan, Italian economy minister Giancarlo Giorgetti said that U.S. stablecoin policy threatens the European economy more than U.S. tariffs.
“The general focus these days is on the impact of trade tariffs. However, even more dangerous is the new U.S. policy on cryptocurrencies and in particular that on dollar-denominated stablecoins,” said Giorgetti.
The minister was referring to the regulatory changes U.S. President Donald Trump is introducing to the crypto sector, including those involving stablecoins. He referenced the GENIUS Act, which sets new stablecoin rules for businesses. Trump is particularly interested in stablecoins, as the company linked to his family, World Liberty Financial, has launched its own stablecoin.
Stablecoins threaten the traditional banking system
If the GENIUS Act is passed, Giorgetti emphasized that savers around the world would be able to invest in essentially risk-free assets without the need for a bank account. For the traditional financial system, this presents a risk, especially in countries with high inflation rates.
“It is therefore easy to foresee their attractiveness for citizens of economies with unstable currencies, but its appeal for people of the euro zone should not be underestimated,” Giorgetti said.
The traditional financial system relies on client deposits to issue loans and create credit. With fewer deposits, systemic risk to the banking sector increases. What’s more, despite a recent rise in euro-denominated stablecoins, dollar stablecoins continue to dominate. Currently, USD-based stablecoins account for 99% of the stablecoin market cap.
To address this issue, Giorgetti suggests that the European Union should fix its fragmented payments system. One solution could be a digital Euro, which would give Europeans easy access to payments without relying on foreign alternatives.
