Trump Advocates for Cryptocurrency Adoption
The United States Federal Reserve's Board of Governors is set to gather in Washington this Thursday, with the potential for rate cuts on the agenda. The discussion is prompted by the weakness in the labor market and low inflation.
The central bank has also announced a large conference on the topic, scheduled for the end of October. This conference, to be held in Washington, will bring together a range of interested parties, including Federal Reserve officials, financial regulators, representatives from the cryptocurrency industry, banking sector leaders, and policy experts involved in digital currency and financial stability discussions.
One of the key topics of interest is the USD Coin, a digital dollar based on decentralized blockchain databases. The rise of the USD Coin has raised questions about its impact on the "real" dollar, as the Fed and its President, Powell, grapple with this new development.
The US's total debt is the highest in the world, with a ratio of around 120 percent of GDP, which is twice as high as Germany's. If the USD stablecoin becomes the leading currency, interest payments will no longer leave the country, according to Paymantbanking.com.
The European Central Bank's main refinancing rate is 2.15 percent, lower than the US rates. However, US payment service providers like Visa, Mastercard, and PayPal dominate the European market. If stablecoins are backed by US government bonds, Trump's government will find it easier to refinance its debt at a lower interest rate.
The "Genius Act" creates a comprehensive, binding legal framework for cryptocurrencies for the first time. This act, signed by President Donald Trump in July, marks the beginning of a new era for digital financial infrastructure.
The Bank for International Settlements (BIS) recently hosted an Innovation Summit, discussing challenges beyond inflation and economic growth, including the climate crisis, financial crime, and US public debt. The BIS's 2025 annual report highlighted that stablecoins pose risks related to financial crime and a threat to monetary sovereignty.
Crypto enthusiast Donald Trump wants to redirect global demand for digital dollars into a stream of interest-free capital flows towards the US treasury. Meanwhile, the ECB President Christine Lagarde is likely to accelerate her plans for a digital euro, or D€, following the stablecoin decision.
Central bankers hope that strict regulations regarding reserves, licenses, and transparency will establish the USD Coin as an official digital payment method without losing trust in the financial system. If the USD stablecoin becomes the leading currency, it could have significant implications for the global financial landscape.
The EU's perspective is that Washington has once again created facts that will not pass by the old continent unnoticed. As the world watches, the US continues to shape the future of digital finance.
Read also:
- EPA Administrator Zeldin travels to Iowa, reveals fresh EPA DEF guidelines, attends State Fair, commemorates One Big Beautiful Bill
- Musk announces intention to sue Apple for overlooking X and Grok in the top app listings
- Cybertruck's Disappointing Setback, Musk's New Policy, Mega-Pack Triumphs, Model Y's Anticipated Upgrade Prior to Refresh (Week of January 25 for Tesla)
- Innovative Company ILiAD Technologies Introduces ILiAD+: Boosting Direct Lithium Extraction Technology's Efficiency Substantially
