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The European Central Bank (ECB) hopes that U.S. President Donald Trump’s backing of dollar-pegged cryptocurrencies will accelerate legislative approval for the digital euro, ECB board member Piero Cipollone told Reuters.

Trump’s support for stablecoins tied to the U.S. dollar could strengthen the global dominance of American payment systems, adding urgency to the EU’s efforts to develop its own central bank digital currency (CBDC).

The ECB has positioned the digital euro as a secure electronic payment method that would reduce reliance on U.S. financial firms such as Visa and PayPal. However, progress has stalled since the European Commission proposed digital euro legislation in June 2023, facing skepticism from some lawmakers and banking institutions.

“The political world is becoming more alert to this,” Cipollone said. “And it’s possible that we will see an acceleration in the process.”

Legislative Timeline and Banking Concerns

Cipollone said he hopes the EU Parliament and Council will finalize the digital euro legislation before the summer, allowing negotiations with the European Commission to move forward. The ECB is expected to vote on the project in November, determining whether to officially launch the currency.

However, concerns remain over the impact of a digital euro on European banks. Financial institutions fear that widespread adoption could divert customer deposits into ECB-backed digital wallets, reducing their liquidity. To mitigate this, the ECB has proposed capping digital euro holdings at a few thousand euros per person and ensuring that deposits remain non-interest-bearing.

Global CBDC Developments

Several countries have already launched CBDCs, including Nigeria, Jamaica, and the Bahamas, while Russia, China, Australia, and Brazil are in advanced testing phases, according to the Atlantic Council.

In contrast, Trump has prohibited the U.S. Federal Reserve from issuing its own CBDC, choosing instead to support privately issued stablecoins. This shift is seen as an opportunity for faster adoption of U.S. dollar-backed digital currencies, further pressuring Europe to accelerate its own efforts.

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