Will America’s Crypto Push Help Birth a Digital Euro?

The digital dollar may be off the table for now, following a recent executive order.

However, the European Central Bank (ECB) hopes America’s new pro-cryptocurrency attitude can help bring about the digital euro, Reuters reported Thursday (Feb. 6).

As that report noted, the ECB is floating the idea of a digital currency — basically a digital wallet backed by the central bank — to give Europe an electronic payment method that doesn’t depend on U.S. companies like PayPal or Visa.

Piero Cipollone, a member of the ECB board, told Reuters that President Donald Trump’s support for globally available stablecoins tied to the dollar adds yet another U.S.-made payment tool to that list, giving more urgency to the digital euro efforts.

The European Commission proposed legislation for a digital in 2023, but, as the report points out, it has not gone anywhere amid skepticism from bankers and lawmakers.

“The political world is becoming more alert to this,” Cipollone said. “And it’s possible that we will see an acceleration in the process.”

He added that he hoped that the EU’s Parliament and Council would finish work on the digital euro legislation before the summer, opening the door for negotiations with the Commission. That would allow new rules to be finalized by November, when the central bank is scheduled to vote on whether to launch a digital euro.

“Political processes are complex and there are many things on the table,” Cipollone said. “Obviously the sooner the better, but we fully understand their needs.”

He told Reuters the spread of U.S. stablecoins as a means of payment was “worrisome,” arguing that if Europeans “start to use stablecoins to pay, given that most of them are American and dollar-based, they will be transferring their deposits from Europe to the United States.”

While dozens of countries around the world are developing central bank digital currencies (CBDCs), the U.S. is not among them.

Soon after taking office last month, Trump signed an executive order banning the creation of a CBDC in the U.S.

As PYMNTS wrote at the time, the “administration’s rationale for this ban appears to center on concerns over privacy, surveillance and the potential displacement of the private sector in payments innovation.”