ECB Seeks To Counter Trump’s Stablecoin Plan with Digital Euro

US President Donald Trump’s highly anticipated crypto-focused executive order has triggered a significant buzz in the community. The order outlines a broader crypto strategy, with a key focus on promoting dollar-backed stablecoins. However, the European Central Bank (ECB) proposed a digital euro to counter the President’s stablecoin plan.

United States President Donald Trump’s recent executive order on cryptocurrencies has sparked a lot of discussion within the crypto community. The order, which outlines a broader strategy for the country's approach to digital assets, places a particular emphasis on promoting dollar-backed stablecoins. However, in a move to counter this strategy, the European Central Bank (ECB) has proposed the introduction of a digital euro.

According to a report by Reuters, the ECB's move is aimed at addressing the potential consequences of Trump's stablecoin strategy. While the order prohibits the development of central bank digital currencies (CBDCs), the ECB is proposing to introduce a digital alternative to the euro.

In response to Trump's directive to government agencies to explore the creation of a national digital asset stockpile, ECB board member Piero Cipollone highlighted the importance of introducing a digital euro. He argued that Trump's stablecoin plan could lure customers away from traditional banks.

"I guess the key word here (in Trump’s executive order) is worldwide," Cipollone said. "This solution, you all know, further disintermediates banks as they lose fees, they lose clients…That’s why we need a digital euro."

The future of the digital euro, however, could be impacted by concerns raised by banks regarding its potential effect on their business. Banks fear that the introduction of a digital euro could lead to customers shifting their money from traditional banks into ECB-guaranteed digital wallets. This could potentially reduce bank deposits and, in turn, their available reserves.

The central bank is currently conducting an analysis of the implications of the asset. While the ECB has expressed its interest in launching a digital euro, a final decision on the matter is still pending approval from European lawmakers.