Italian Minister Warns U.S. Stablecoin Rules Threaten Euro Zone

Italian finance and economy minister Giancarlo Giorgetti has expressed concern over the potential impact of U.S. stablecoin regulations on the European economy, stating that it poses a greater threat than tariffs. During an asset management event in Milan, Giorgetti highlighted the dangers of the new U.S. policy on cryptocurrencies, particularly dollar-denominated stablecoins.

Giorgetti's remarks come in response to regulatory changes introduced by U.S. President Donald Trump, including the GENIUS Act, which aims to set new rules for stablecoins. The minister noted that if the GENIUS Act is passed, savers worldwide would have the ability to invest in risk-free assets without the need for a traditional bank account. This shift could significantly disrupt the traditional banking system, especially in countries with high inflation rates.

Giorgetti emphasized that the appeal of stablecoins extends beyond economies with unstable currencies, as they could also attract citizens of the euro zone. The traditional financial system, which relies on client deposits to issue loans and create credit, faces increased systemic risk with fewer deposits. Currently, dollar-based stablecoins dominate the market, accounting for 99% of the stablecoin market cap.

To mitigate this risk, Giorgetti suggested that the European Union should address its fragmented payments system. One potential solution is the introduction of a digital Euro, which would provide Europeans with easy access to payments without relying on foreign alternatives. This move could help reduce the appeal of dollar-denominated stablecoins and strengthen the euro zone's financial stability.