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In a recent interview with French weekly La Tribune Dimanche on March 15, François Villeroy de Galhau, the head of France’s central bank, issued a stark warning: Donald Trump’s policies—particularly his enthusiasm for cryptocurrency and financial deregulation—could destabilize the global economy.
Why this matters: A history of U.S.-led financial crises
Villeroy de Galhau pointed out that financial turmoil often starts in the U.S. before rippling across the world. He backed up his concerns with historical examples, noting that three of the last five major financial crises had American origins:
- The Great Depression (1929) – Triggered by a stock market crash, leading to a worldwide economic downturn.
- The 1973 OPEC Oil Shock – A crisis worsened by U.S. monetary policies, causing global inflation and stagnation.
- The 2008 Global Financial Crisis – Sparked by the collapse of the U.S. housing market and reckless banking practices, dragging the entire world into recession.
Now, Villeroy de Galhau warns that Trump’s aggressive deregulation and embrace of digital currencies could lay the groundwork for another major financial shock.
A key concern is Trump’s pro-crypto stance. His administration has introduced policies that favor digital assets and loosen restrictions on the financial sector. Some of the most controversial moves include:
- The Strategic Bitcoin Reserve – Trump recently signed an executive order establishing a national Bitcoin reserve, sparking debate over whether digital currencies should be part of official financial strategies.
- Rolling Back Operation Choke Point 2.0 – His administration is making it easier for crypto companies to access traditional banking services, removing barriers that were put in place to prevent financial instability.
While crypto enthusiasts see these moves as groundbreaking steps toward financial innovation, critics warn they could create chaos.
Immediate market reactions: Bitcoin’s rollercoaster ride
The impact of Trump’s crypto policies was felt almost immediately. Following the announcement of the Strategic Bitcoin Reserve, Bitcoin’s price plummeted below $84,000, wiping out over $250 million in investments through liquidations.
Economist Peter Schiff, a long-time Bitcoin skeptic, criticized the move, arguing that cryptocurrency’s extreme volatility makes it a poor choice for national reserves. He further warned that Trump’s crypto-friendly stance could end up benefiting wealthy insiders while exposing regular taxpayers and banks to significant risks.
Villeroy de Galhau’s concerns extend beyond just Bitcoin. He also raised alarms about Trump’s protectionist trade policies, which could strain U.S.-Europe relations.
One of the biggest flashpoints? Trump’s 25% tariff on European cars, a move that has frustrated European leaders—especially in France and Germany.
Rather than simply reacting to Trump’s economic policies, Villeroy de Galhau urges European countries to take proactive steps to strengthen their financial independence.
Europe’s Response: Strengthening the euro and exploring digital alternatives
To safeguard financial stability, European leaders are considering multiple strategies, including:
- Strengthening the euro’s global role to reduce dependence on the U.S. dollar.
- Enhancing Europe’s financial independence by creating stronger savings and investment frameworks.
- Exploring digital alternatives, such as a central bank digital currency (CBDC), to provide a stable alternative to cryptocurrencies.
German central bank chief Joachim Nagel has echoed these concerns, calling Trump’s financial policies a “horror show” and advocating for a digital euro to protect European economies from external shocks.
While some European financial leaders firmly oppose Bitcoin in national reserves, not everyone agrees.
- Nagel and Villeroy de Galhau believe Bitcoin lacks the transparency and liquidity necessary for a stable financial system.
- Aleš Michl, head of the Czech National Bank, has taken a different approach, stating that Bitcoin could be considered for reserve diversification—a strategy already being pursued by nations like El Salvador.
Meanwhile, in the U.S., crypto adoption is growing. Some U.S. states are pushing for Bitcoin-backed reserves, and billionaire investor Michael Saylor’s firm, Strategy, recently added $10.7 million worth of Bitcoin to its holdings, with plans to expand even further.
Is the Global financial order changing?
With Trump doubling down on crypto deregulation, aggressive trade policies, and financial nationalism, global markets are at a crossroads.
- Will Europe push for a stronger, more independent financial system?
- Will Bitcoin become a key player in national reserves, or will traditional banks resist its volatility?
- Could Trump’s policies trigger the next big financial meltdown—or will they usher in a new era of financial innovation?
One thing is clear: the world’s financial landscape is shifting fast, and central banks across Europe and beyond are racing to keep up.