The European Central Bank (ECB) is accelerating efforts to launch a digital euro in response to United States President Donald Trump’s recent executive order aimed at supporting US-backed stablecoins on a global scale. ECB executive board member Piero Cipollone voiced the urgency of the move at a policy meeting in Frankfurt today, warning of potential disruptions to traditional banking systems. Yesterday, President Trump signed an executive order prioritizing U.S. dominance in digital finance technology. The order emphasized the need to protect the sovereignty of the U.S. dollar by promoting legal and legitimate dollar-backed stablecoins around the world. Speaking at the Institute of Law and Finance’s 13th Future of Finance Conference, Cipollone expressed concern about the impact this strategy could have on the Eurozone. “I think the key word in Trump’s executive order is worldwide,” Cipollone said. “This solution disintermediates banks even more because they lose their fees, they lose their customers. That’s why we need a digital euro.” The ECB envisions a digital euro as an online wallet, secured by the central bank but operated through private institutions such as commercial banks. This would allow users, including those without traditional bank accounts, to make payments securely. However, individual assets would likely be limited to prevent excessive liquidity shifts and the funds would not earn interest. Cipollone highlighted the need to accelerate testing and regulatory approval to avoid being left behind in the global race for digital currency leadership. While the ECB is still experimenting with the design and functionality, the final decision on implementation depends on pending legislation in the European Union. The Trump administration’s executive order takes a different approach by explicitly prohibiting the Fed from issuing its own central bank digital currency (CBDC). Instead, the U.S. is focusing on encouraging private sector innovation to cement dollar-backed stablecoins as a preferred alternative in global finance. Cipollone warned that U.S. efforts to push for global adoption of stablecoins could further strain the region’s financial systems by pushing customers away from traditional European banks. “The need for a digital euro has never been more evident,” he said. *This is not investment advice. Continue Reading: European Central Bank Issues Unexpected Statement on Trump’s Bitcoin and Cryptocurrency Orders – Looks Like They Are Panicking
