Francois Villeroy de Galhau, Governor of the Bank of France and a key member of the European Central Bank (ECB), has warned that the U.S.’s increasing embrace of cryptocurrencies could lead to global financial instability. In an interview with French weekly La Tribune Dimanche, Villeroy de Galhau criticized the Trump administration’s policies, claiming they are “sowing the seeds of future upheavals.” He noted that crises often begin in the U.S. and spread worldwide, warning that by encouraging non-bank finance and crypto assets, the U.S. is jeopardizing financial stability.
Trump’s administration has been actively supporting the cryptocurrency industry, pushing for major reforms to make the U.S. the global leader in digital assets. Under his leadership, the U.S. has formed a Presidential Working Group on Digital Assets, created a Strategic Bitcoin Reserve, and introduced several crypto-friendly initiatives. However, the market’s reaction has been volatile. Bitcoin, for example, recently dropped below $80,000, marking a 25% decline from its January peak of $109,000, highlighting investor uncertainty. The S&P 500 also fell over 10% after Trump threatened to impose tariffs on European spirits.
The ECB has been critical of crypto's speculative nature, with ECB President Christine Lagarde previously calling Bitcoin a “speculative asset with no intrinsic value.” The bank has warned that unregulated digital currencies could undermine global financial stability. In contrast, the ECB has been working toward a more controlled approach with its digital payments infrastructure initiative, which aims to introduce a central bank digital currency (CBDC), such as the digital euro. This initiative reflects the ECB’s preference for safer, state-backed solutions as opposed to the decentralized nature of cryptocurrencies.
Villeroy de Galhau’s comments reflect Europe’s growing concern about the U.S.'s laissez-faire attitude toward crypto. He believes Europe must strengthen its negotiating position to counterbalance the U.S. and avoid complacency in the face of the shifting global financial landscape. The ECB’s regulatory approach stands in stark contrast to the U.S., where the Securities and Exchange Commission (SEC) has eased its regulatory crackdown on crypto platforms.
Furthermore, the European Union has introduced the Markets in Crypto-Assets Regulation (MiCA), designed to create a unified regulatory framework for the crypto sector across its 27 member states. While MiCA aims to provide more clarity and stability in the market, its strict licensing and compliance requirements could pose challenges for smaller crypto firms, especially those struggling to meet capital reserve and consumer protection standards.
As both the U.S. and Europe continue to shape their approaches to cryptocurrency, the potential clash in their regulatory philosophies could have lasting effects on the future of the global crypto industry.
