Italy is stoking caution against US stubcoin restrictions: “A greater threat than tariffs”

Italian Minister of Finance and Economy Giancarlo Giorgeti warns that the dollar’s ridiculousness is a greater threat to the European economy than tariffs.

US policy regarding Stablecoins is causing vigilance among European leaders. At an asset management event in Milan, Italian Economy Minister Giancarlo Giorgetti said the US stubcoin policy would threaten the European economy more than US tariffs.

“The general focus these days is on the impact of trade tariffs. But even more dangerous is the new US policy on cryptocurrencies, particularly the dollar-based sectarian stubcoins,” Giorgetti said.

The minister had mentioned changes in regulatory authorities that US President Donald Trump has introduced to the crypto sector, including those that include stubcoin. He referenced the genius law of setting new Stablecoin rules for businesses. Trump is particularly interested in Stablecoins as he is associated with a company linked to his family, World Liberty Financial.

Stablecoins threaten traditional banking systems

If the Genius Act was passed, Giorgetti emphasized that savers around the world can invest in assets that are essentially risk-free without the need for a bank account. In the traditional financial system, there is risk, especially in countries with high inflation.

“Therefore, it is easy to predict the appeal of an economy with a volatile currency to citizens, but the appeal to people in the eurozone should not be underestimated,” Giorgetti said.

Traditional financial systems rely on client deposits to issue loans and create credits. Low deposits increase systemic risk to the banking sector. Furthermore, despite the recent rise in stable coins denominated in euros, dollar stubcoins continue to dominate. Currently, USD-based Stablecoins account for 99% of Stablecoins’ market capitalization.

To address this issue, Giorgetti suggests that the European Union should modify its fragmented payment system. One solution could be the digital euro. This allows Europeans to easily access payments without resorting to foreign alternatives.

read more: ECB sees “big potential” with conditional payments in digital euros, but no blockchain