The US’ growing embrace of cryptocurrencies and non-bank financial institutions could set the stage for the next financial crisis, according to European Central Bank (ECB) Governing Council member Francois Villeroy de Galhau.
Speaking in a recent interview with French weekly La Tribune Dimanche, Villeroy cautioned that the US is taking a dangerously negligent approach toward crypto regulation.
“The United States risks sinning through negligence,” he said, as reported by Bloomberg.
“Financial crises often originate in the United States and spread to the rest of the world. By encouraging crypto-assets and non-bank finance, the American administration is sowing the seeds of future upheavals.”
From Crackdowns to Support: How US Crypto Policy Has Transformed
The warning comes as the US embraces a more pro-crypto stance under President Donald Trump’s administration. After years of regulatory uncertainty, the Securities and Exchange Commission (SEC) has taken a more lenient approach. It has dropped multiple lawsuits against crypto firms following the resignation of former Chair Gary Gensler.
Trump has also signed an executive order paving the way for the creation of a Strategic Bitcoin Reserve. The order also calls for a separate stockpile of digital assets. This move signals a broader institutional shift toward crypto adoption.
This sharply contrasts with Europe’s more cautious regulatory framework. Villeroy stated that the ECB and European regulators follow a more structured approach. They aim to better contain risks associated with crypto and non-bank finance.
Europe’s Digital Euro Plans Gain Urgency Amid US Crypto Dominance
Beyond financial stability concerns, European officials are increasingly worried about the geopolitical impact of America’s crypto embrace.
Last week, Pierre Gramegna, managing director of the European Stability Mechanism issued a warning. He said that the US’ growing support for cryptocurrencies could undermine Europe’s monetary autonomy. Gramegna argued that this shift strengthens the case for a digital euro. European policymakers see it as a way to counterbalance America’s influence in global finance.
Gramegna further cautioned that the evolving US stance on digital currencies could reignite efforts by both foreign and American tech firms to roll out large-scale payment solutions using dollar-backed stablecoins. Such developments could weaken the euro’s role in international transactions, effectively increasing global dependence on the US dollar through digital assets.
Regulatory Rift Widens as US Embraces Crypto, ECB Stays Cautious
Villeroy too underscored the need for the euro to play a stronger international role. He stressed the importance of building a unified savings and investment market, one that would attract international investors and boost confidence in the European currency.
As the US accelerates its crypto adoption, Villeroy’s and Gramegna’s comments highlight a growing divide between American and European regulatory philosophies.
While Washington bets on digital assets as a cornerstone of its financial future, the ECB remains firmly cautious, warning that an unchecked expansion of crypto could trigger the next global financial disruption.
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