US crypto policies risk global financial instability

European Central Bank (ECB) Governing Council member François Villeroy de Galhau has warned that the United States' growing embrace of cryptocurrencies and non-bank finance could lead to the next global financial crisis.

Speaking to La Tribune Dimanche, Villeroy criticised the U.S. for its "negligent" approach to crypto regulation.

“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,” he stated.

Under President Donald Trump’s administration, U.S. crypto policies have shifted significantly.

The Securities and Exchange Commission (SEC) has relaxed its stance, dismissing lawsuits against crypto firms, while Trump signed an executive order establishing a Strategic Bitcoin Reserve and calling for a stockpile of digital assets.

These moves signal a broader institutional push toward crypto adoption.

In contrast, Europe has adopted a cautious regulatory framework.

Through its Markets in Crypto-Assets Regulation (MiCA), European regulators aim to mitigate risks by imposing strict licensing requirements, capital reserves standards, and consumer protection rules on virtual asset service providers (VASPs).

ECB officials argue that this structured approach better addresses the challenges posed by digital currencies.

The geopolitical implications of America’s pro-crypto stance also concern European policymakers.

Pierre Gramegna, managing director of the European Stability Mechanism, warned that U.S. dominance in cryptocurrency could undermine Europe’s monetary autonomy.

He emphasised the urgency of advancing plans for a digital euro to counterbalance America’s influence in global finance.

Villeroy echoed these concerns, stressing that Europe must strengthen the euro’s international role by building a unified savings and investment market.

He cautioned that unchecked crypto expansion could destabilise global financial systems, highlighting the growing divide between U.S. and European regulatory philosophies.