The Italian Minister of Finance and the Economy, Giancarlo Giorgetti, warns that the stables of the dollar constitute a greater threat to the European economy than prices.
The American policy on stablescoins stimulates the alarm among European leaders. During an asset management event in Milan, the Italian Minister of the Economy Giancarto Giorgetti said that the American stablecoin policy threatened the European economy more than the American rates.
“The general objective nowadays is the impact of trade rates. However, even more dangerous is the new American policy on cryptocurrencies and in particular that of staboins called dollars,” said Giorgetti.
The Minister referred to the regulatory changes that US President Donald Trump is in the cryptography sector, including those involving stablecoins. He referred to the Act on Engineering, which establishes new stablecoin rules for businesses. Trump is particularly interested in Stablecoins because the company linked to his family, World Liberty Financial, launched his own stablecoin.
Stablecoins threaten the traditional banking system
If the engineering law is adopted, Giorgetti stressed that savers around the world would be able to invest in assets essentially without risk without the need for a bank account. For the traditional financial system, this presents a risk, especially in countries with high inflation rate.
“It is therefore easy to predict their attractiveness for citizens of economies with unstable currencies, but its call for people in the euro zone should not be underestimated,” said Giorgetti.
The traditional financial system is based on customer deposits to issue loans and create credit. With fewer deposits, the systemic risk for the banking sector increases. In addition, despite a recent increase in stablecoins called in euros, the stables of the dollar continue to dominate. Currently, the USD -based stablecoins represent 99% of the market capitalization of the stable reserve.
To resolve this problem, Giorgetti suggests that the European Union should correct its fragmented payment system. One solution could be a digital euro, which would give Europeans easy access to payments without relying on foreign alternatives.
