The European Central Bank has issued a "red alert" regarding the expansion of American stablecoins, marking the official start of a financial sovereignty war.

The ECB has expressed concern about US President Donald Trump's stance in favor of cryptocurrencies, especially that the expansion of stablecoins could trigger the risk of financial "contagion" and jeopardize the stability of the European economy. (Summary: Circle launches stablecoin "refund protocol" to solve payment pain points? Pros and Cons at a Glance) (Background supplement: Italian Economy Minister: The potential impact of US stablecoins on Europe far exceeds tariffs, calls for the promotion of digital euro confrontation) According to a policy document obtained by foreign media Politico, the European Central Bank (ECB) has expressed deep concern about US President Donald Trump's recent apparent support for the cryptocurrency industry. The ECB warned that the Trump administration's aggressive push for cryptocurrency-friendly policies, particularly the expansion of the dollar stablecoin, could pose a "contagion" risk to the global financial system, which in turn could spill over and jeopardize Europe's own economic stability. ECB's Deep Concerns About Trump's Cryptocurrency Policy The ECB believes that this policy shift could lead to a significant flow of money into U.S. crypto assets, particularly dollar stablecoins. As a bridge between traditional finance and the crypto world, the rapid expansion and widespread application of stablecoins may amplify potential financial risks. Looking back at the last crypto winter, the collapse of FTX not only led to huge losses for investors, but also triggered a series of trust crises and liquidity crunches, and many related institutions collapsed, and market confidence once fell to the bottom. The ECB is concerned that if the United States, with its strong dollar position and loose regulatory policies, vigorously promotes the global application of dollar stablecoins, once these stablecoin issuers have problems, or if the US regulatory policy takes a sharp turn, its negative impact will quickly spread through the global financial network, forming an uncontrollable "contagion", and European economies will not be spared. MiCA Regulation Faces U.S. Stablecoin Challenges We know that the European Union passed the landmark Crypto Asset Markets Regulation (MiCA) in 2023, which aims to establish a comprehensive regulatory framework for crypto asset service providers to protect investors and maintain financial stability. Among them, MiCA imposes restrictions on the issuance and circulation of stablecoins, especially those backed by foreign currencies such as the US dollar, with the aim of controlling the size and influence of non-euro stablecoins in the EU in order to maintain monetary sovereignty and financial stability in the euro area. However, the main purpose of two new draft bills being prepared in the US – the STABLE Act and the GENIUS Act – seems to be precisely to expand the reach of dollar-backed stablecoins. The potential advancement of these two bills has made the ECB uneasy. ECB policymakers are concerned that even with MiCA regulations in place, they may not be strong enough to effectively counter the shocks and potential risks of a strong dollar stablecoin policy from the United States. They worry that U.S. regulations could create a more attractive environment for dollar stablecoins to gain a larger market share globally, including in Europe, weakening MiCA's effectiveness and increasing exposure to the European financial system. Intra-EU divisions: ECB and European Commission wrestle However, there seem to be different views within the EU on the potential threat of US stablecoins. According to Politico, the European Commission has taken the ECB's analysis and warnings with reservations and even refuted them. The Executive Committee believes that the ECB may have exaggerated the threat from US crypto policy, especially stablecoins. EU officials have privately revealed that the ECB has emphasized the risks of stablecoins, possibly in part to garner political support to advance its own controversial "Digital Euro" project. The Digital Euro is a Central Bank Digital Currency (CBDC) being explored by the ECB to provide a safe and reliable digital payment option for European citizens while addressing the challenges that private digital currencies such as stablecoins and foreign CBDCs may pose. However, the design of the digital euro, privacy protections, and its impact on the existing banking system continue to generate widespread discussion and concern within the EU. Therefore, using external threats, such as US stablecoins, as a reason to promote a digital euro naturally raises some questions.... But it is undeniable that the legislative progress in stablecoin regulation in the United States has brought new variables and challenges to regulators and policymakers in Europe and even around the world. This transatlantic game around cryptocurrency regulation, the impact of stablecoins, and central bank digital currencies is expected to continue to influence the evolution of the global financial landscape. Related Stories You can airdrop with only "stablecoins"! Eight major projects Quick overview of participation methods Three minutes to understand USDT0: Is Tether's cross-chain stablecoin reliable? What is USDi? Value anchored to U.S. CPI, can protect cash purchasing power? "The European Central Bank "issued a red alert" on the expansion of US stablecoins, and a financial sovereignty war officially began" This article was first published in BlockTempo's "Dynamic Trend - The Most Influential Blockchain News Media".