America's Crypto Embrace Can Be Turned Into a Trade Weapon

Most stablecoins being dollar-based could expose Europe to risk

- Lionel Laurent

Are trade wars good for technology after all? Circle Internet Group, a major issuer of digital currencies designed to replicate the US dollar, has tripled in value since going public and is worth $23.6 billion (or 150 times last year's earnings). Call it Zuckerberg's revenge: Six years after Meta Platforms sparked a global backlash with its own plans for a digital dollar, the $250 billion stablecoin market is booming and has the backing of Donald Trump, Congress, and investors.

Europeans are watching the froth with concern. Even as the Louvre Museum this week hosted a crypto conference full of buzz at the prospect of more traditional financial institutions like Goldman Sachs Group or Societe Generale dipping their toe in this market, officials fear virtual currencies are a serious financial threat for the continent and an extension of Trump's ambitions of bringing global trade to heel. And they may be right to worry.

While crypto's roots are libertarian and anti-state, stablecoins could serve to entrench the existing tech and monetary order dominated by the US, as 95% of them are dollar-denominated.

The euro commands less than 1%, despite accounting for 20% of global reserves, according to specialist publication Euro Stable Watch.