Amid the hype that has emerged after President Donald Trump signed an executive order that, among other things, prohibits the development of a central bank digital currency (CBDC) in the United States, the European Union (EU) responded to the new president, emphasizing the “need” for a digital euro.
A member of the European Central Bank (ECB) board, Piero Cipollone, said on Friday that Trump's order to promote the development and growth of legal and legitimate stablecoins may cause customers to abandon banks, strengthening a potential use case for the European CBDC.
According to Cipollone, “this solution (stablecoins) further disintermediates banks, as they lose commissions, they lose clients… That is why we need a digital euro,” reported the Reuters agency.
The digital euro is at an advanced stage of research and preparation. The ECB is currently in the phased pilot stage, with a decision pending in 2025 or 2026 on whether to deploy the CBDC. This project adds to the dozens of other CBDC initiatives currently in development around the world.
Cipollone sees room for CBDC implementation. Source: Nova.
As a sign of its progress, the European Payments Council announced this week that the Spanish fintech company Monei, as well as other companies in the sector, would form part of a working group to carry out tests of digital payments programme integrates 83 payment service providers and their associations.
A CBDC, or central bank digital currency, is a digital currency issued and backed by a central bank. Its implementation poses both opportunities and challenges, including significant risks to privacy and financial freedom.
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As CriptoNoticias has reported, the adoption of CBDCs could lead to more intense financial surveillance by governments, by providing centralized control over digital transactions. In addition, there is a risk that they will be used to limit the financial autonomy of individuals , since each transaction could be monitored and regulated more strictly.
using the digital euro and relying on ECB technology. In total, the Trump signs pro-cryptocurrency order
Yesterday, Thursday, President Donald Trump signed an executive order where, among other measures, he expresses support for stablecoins such as USDT to strengthen the dollar and establishes the prohibition of central bank digital currencies (CBDC).
This order is part of Donald Trump's pro-cryptocurrency move, which summarizes in an executive order several of the promises made during his campaign, such as the creation of a cryptocurrency reserve. Although the Bitcoin community expected this reserve to be exclusively for Bitcoin, the order does not specify this detail.
Trump’s push for stablecoins is being interpreted as an attempt to maintain the dollar’s hegemony in a context where CBDCs could upset the global financial balance. Stablecoins, which are pegged to traditional assets such as the dollar, could offer a safe and regulated alternative to volatile cryptocurrencies, but could also accelerate the disintermediation of traditional banks, a phenomenon that worries European financial regulators.
The debate over CBDCs and stablecoins is not only technological or financial, but also political and philosophical, touching on fundamental issues such as privacy, monetary sovereignty and financial inclusion. While Europe is moving towards a digital version of the euro, the US stance, under the Trump administration, shows a different direction, favouring stablecoins and resisting CBDCs, which could change the landscape of global finance in the coming years.
