During a recent asset management event in Milan, Italy's Economy Minister Giancarlo Giorgetti expressed concerns that U.S. policy on stablecoins poses a greater threat to European economic sovereignty than traditional trade tariffs.

To counteract the influence of foreign-backed cryptocurrencies, the European Central Bank (ECB) is accelerating efforts to develop a digital euro, which would allow EU residents to hold accounts directly with the ECB.

He suggested that the introduction of a digital euro could help improve the EU's fragmented payments system and preserve monetary independence.

The GENIUS Act, in particular, would require stablecoin issuers to maintain one-to-one reserves and comply with Anti-Money Laundering laws, raising concerns about its impact on traditional banking.

He emphasized that dollar-denominated stablecoins undermine the EU's monetary independence, highlighting their growing importance in the multi-trillion dollar cryptocurrency market.

Giorgetti pointed out that these stablecoins have expanded their role beyond crypto trading, facilitating cross-border transactions between cryptocurrencies and fiat currencies.

Giorgetti's remarks come amid a backdrop of U.S. legislative efforts, including the advancement of the STABLE and GENIUS Acts, which aim to regulate stablecoin issuers and reinforce the dominance of the U.S. dollar.

Giorgetti noted that the popularity of stablecoins among eurozone citizens is driven by their ease of use, perceived safety, and ability to operate without a traditional bank account.

Stablecoins allow users to store value and make international payments independently from the U.S. financial system, appealing to eurozone citizens and those in economically unstable regions.

Analysts from Morgan Stanley predict that the ECB will maintain a cautious approach regarding interest rates, as current rates remain restrictive despite lower inflationary pressures.

Recent inflation data shows a slight decrease in the euro area's inflation rate to 2.2% in March 2025, down from 2.3% in February, although economic growth remains sluggish.

Despite expectations that recent tariff hikes would weaken the euro, it has remained stable near $1.14, surprising market analysts who anticipated a decline.