The European Central Bank (ECB) is scared. Scared of Donald Trump, scared of crypto, and apparently, scared of the future. So their recent hand-wringing over a potential “crypto contagion” coming from a Trump-friendly US is, frankly, laughable. Meanwhile, the European Commission is doing its utmost to calm nerves and assure all stakeholders that MiCA is in safe hands. The truth is more nuanced and, I would argue, more optimistic.

The ECB’s fear is based in a very Western, very centralized way of thinking about finance. They view dollar-backed stablecoins as a broader monetary sovereignty issue and a possible drain on EU resources. They’re concerned that there would be a “run” on EU stablecoin issuers. What if, rather than viewing this as a threat, we viewed it as an opportunity? What if the end result of Trump’s crypto embrace would be to not only save Europe, but to destroy it?

Crypto Ignites Developing Economies?

Let's be blunt. Europe isn't a monolith. Germany and France might not be too pleased at the idea of dollar hegemony. For many developing economies in and around the EU, dependable and predictable financing instruments are a key lifeline. Consider the impact on remittances, cross-border trade, and access to capital for small businesses. The traditional banking system has let these communities down—full of fees, red tape, and barriers like ATM deserts.

Crypto, particularly stablecoins, can bypass these hurdles. A Trump-influenced, crypto-friendly US would light a fire under innovation and investment in the crypto space. Such a move would allow more affordable, swifter and convenient financial services hardly ever seen by or used by those that need them most.

Take the example of a small business owner living in Romania, who has been denied a bank loan from the big banks. Through crypto, they can have access to decentralized lending platforms. These platforms, enabled by US-backed foreign stable coins, are giving much-needed capital to expand their businesses and create jobs.

  • Remittances: Lower fees, faster transfers.
  • Cross-border trade: Simplified transactions, reduced currency risk.
  • Access to capital: Decentralized lending, microfinance opportunities.

This isn't some pie-in-the-sky fantasy. It's happening already. Having spent years as an entrepreneur in the Balkans. They’re using crypto to go around broken and corrupt banking systems and access global markets. And unfortunately, their voices are too often lost in the cacophony of the ECB’s doomsaying.

MiCA: Innovation Killer Or Savior?

The Commission’s defense of MiCA is, unsurprisingly, milquetoast bureaucratic at best. They pat themselves on the back for having passed a “landmark” law. In reality, MiCA is unnecessarily complicated, kills innovation and protects the already entrenched financial status quo. A more laissez-faire approach, perhaps influenced by Trump's policies, could foster a more dynamic and competitive crypto ecosystem in Europe.

Why are we so afraid of competition? Why are we so ready to regulate and control, rather than create an environment where innovation can thrive. The ECB’s fear of dollar-backed stablecoins is, at its heart, a fear of losing control. They are hellbent on saving the dog of their digital euro project. In reality, this will just chill innovation and broadening access to financial services to the people who need it the most.

Dollar Dominance: A Bridge Not A Wall?

Yes, dollar-backed stablecoins dominate the market. Rather than attempting to thwart them, shouldn’t the EU prioritize establishing its own competitive stablecoin ecosystem? Rather than erecting barriers, we ought to be expanding access. Dollar-backed stablecoins can provide a stable and accessible alternative to traditional banking systems for individuals and businesses in developing economies, while the EU works to develop its own digital currency infrastructure.

The ECB’s doomsday scenario on the matter depicts a “run” on EU stablecoin issuers. That last option is a remote one, and in all honesty a slap to the face of European investors’ IQ. MiCA gives the ECB authority to block certain stablecoin issuers. This power is invoked only when these issuers imperil payments systems, monetary policy, or monetary sovereignty. So, what's the problem?

The problem is fear. Fear of experimentation, fear of external innovation, fear of losing power. Terror is the worst possible foundation for public policy. Join us in welcoming innovation and building a more inclusive financial system that benefits all Europeans. This change is particularly significant for those living in developing economies. Even as disruptive as such a move may be, Trump’s embrace of crypto could still prove the necessary change of course’s catalyst. So let’s not be timid, but rather bold enough to take the challenge head on.