A senior French central banker has warned that U.S. policy shifts promoting stablecoins could erode European monetary sovereignty in the absence of a digital euro.
Denis Beau, first deputy governor of the Banque de France, warned that the Donald Trump administration’s recent executive order promoting dollar-backed stablecoins poses “concrete adverse consequences” for Europe’s financial sovereignty and called for urgent progress on a digital euro.
In a speech last week, Beau noted that the dxecutive order, signed by U.S. President Donald Trump in late January, prohibits all work related to the development of a new form of central bank digital currency, promotes the development of dollar-backed stablecoins, and encourages citizens and businesses to use public blockchains.
He warned that “without a central bank money-based payment solution,” private, non-European alternatives could dominate tokenized finance.
“If the tokenisation of financial assets were to gather pace, the lack of a central bank money payment solution in euro might therefore threaten the role of central bank money as the anchor of the euro area’s monetary architecture, with concrete adverse consequences.”
Denis Beau
The first deputy governor of the Banque de France linked this trend to an increase in counterparty and liquidity risks, increased fragmentation of settlement, and ultimately a “loss of sovereignty and a weakening of financial stability.”
Beau added that Trump’s new political direction “reinforces the need for Europe to preserve its monetary sovereignty, which means developing its payment sovereignty.” He also noted that Apple Pay and Google Pay have already established a strong foothold in Europe, while European payment systems remain fragmented and are steadily losing market share.
