US President Donald Trump’s executive order on the country’s leadership in digital financial technology has escalated the European Union’s concerns around US dollar dominance in the stablecoin market.
European Central Bank (ECB) executive board member Piero Cipollone addressed the digital euro’s role in supporting Europe’s financial and strategic autonomy at a panel of the 13th ILF Conference on the Future of the Financial Sector in Frankfurt on Jan. 24.
Cipollone expressed concerns over US dollar dominance in the stablecoin market, which is a major reason for the European Union to continue building its central bank digital currency (CBDC), the digital euro.
US dollar stablecoins account for 97% of all stablecoins globally
During the panel, Cipollone raised concerns over Europe’s growing reliance on international card schemes, which currently settle more than 60% of card payments in the EU.
He also mentioned the rapid growth of mobile app payments in the EU, which saw their value share in day-to-day retail payment transactions grow from 1% in 2019 to 9% in 2024.
An excerpt from Piero Cipollone’s CBDC report issued on Jan. 17, 2025. Source: ECB
Among other concerns, Cipollone referred to the overwhelming role of the US dollar in the stablecoin market. At the time of writing, dollar-backed stablecoins account for 97% of the global stablecoin market, which is valued at $215 billion, according to CoinGecko.
Given these concerns, Cipollone reiterated the need for a digital euro to preserve people’s access to central bank money and to allow European banks to continue serving a key role in our financial system.
Trump pushes dollar sovereignty and further growth through stablecoins
Adding to the EU’s concerns around the overwhelming role of the US dollar in the stablecoin market, the Trump administration has signaled its intention to further promote dollar-backed stablecoins.
In the executive order (EO) on “Strengthening American leadership in digital financial technology,” the Trump administration pledged to promote the US dollar’s sovereignty, “including through actions to promote the development and growth of lawful and legitimate dollar-backed stablecoins worldwide.”
An excerpt from the “Strengthening American leadership in digital financial technology” EO. Source: White House
Related: EU regulator urges firms to restrict non-MiCA-compliant stablecoins
While pushing US dollar stablecoins, the order prohibits the establishment, issuance, circulation and use of CBDCs in the US, raising significant challenges for global CBDC development.
Is dollar supremacy the ultimate goal of Trump’s EO?
While many in the crypto community see the executive order as confirmation of Trump’s pro-crypto agenda, some observers suggested that its ultimate goal is to maintain US dollar dominance worldwide.
“In the crypto executive order, broad statements are meant to put the US at the forefront of the development of digital financial assets and infrastructure,” attorney David Lesperance told Cointelegraph, adding:
“However, that support ends if any of those developments threaten the USD as the world’s reserve currency. Specifically targeted are CBDC.”
According to Lesperance, the Trump administration would likely be willing to curb CBDC development worldwide.
“Trump is clearly using bargaining chips such as the threat of tariffs as a means to force the EU and other economies to impose a similar CBDC ban,” the attorney stated.
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