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Olaf Sleijpen Warns Stablecoins May Force ECB to Rethink Rates

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**Stablecoin Boom Pushes ECB to Rethink Policy and Safeguard Europe’s Economy**

The rapid rise of stablecoins has prompted the European Central Bank (ECB) to reconsider its monetary policy and take measures to protect Europe’s financial stability. The surge of dollar-backed tokens is raising concerns over Europe’s monetary sovereignty and liquidity, with the ECB warning that stablecoins could soon influence inflation and financial stability across the eurozone.

**Dollar-Backed Stablecoins See Massive Growth**

This year, stablecoins pegged to the US dollar have expanded dramatically, surpassing $300 billion in value. This growth surge follows new US regulations allowing private firms to issue tokens backed by government securities. While these developments support innovation in digital finance, they also increase Europe’s vulnerability to risks linked to the American financial system.

Many stablecoins hold large amounts of US Treasuries as collateral. A sudden wave of redemptions could force issuers to rapidly sell these assets, potentially disrupting bond markets and causing liquidity shortages in Europe’s banking sector. As a result, the ECB may find itself compelled to intervene to maintain market stability and economic confidence.

**Monetary Sovereignty at Stake**

Regulators are increasingly recognizing stablecoins as a vital part of the cross-border payments ecosystem. Despite this, their dominance, especially of dollar-backed tokens, poses a threat to Europe’s monetary sovereignty. The ECB is closely examining how the growing prevalence of these digital assets could affect monetary policy transmission within the eurozone.

**Potential Adjustments to Monetary Policy**

In the event of a stablecoin-induced market disruption, the ECB could be forced to adjust its monetary policy. A sharp drop in stablecoin values might strain liquidity, prompting changes in interest rates to stabilize conditions. However, ECB officials emphasize a preference for deploying financial stability tools before resorting to rate adjustments.

Currently, the ECB keeps interest rates steady following several reductions that lowered borrowing costs to two percent. Market forecasts suggest limited chances for additional cuts next year. Still, unpredictable shocks from digital assets like stablecoins have the potential to alter this outlook.

Olaf Sleijpen, Governor of the Dutch Central Bank, noted that while inflation risks remain balanced for now, the rapid contagion effects from digital markets require constant vigilance. Policymakers intend to base future decisions strictly on evolving data and market conditions.

**Europe’s Strategic Response**

To counteract the dominance of dollar-based stablecoins, nine major European banks—including ING and UniCredit—are collaborating to create a euro-backed stablecoin under the EU’s Markets in Crypto-Assets (MiCA) regulatory framework. The consortium aims to launch this digital token by 2026, bolstering payment resilience within the region.

This initiative has received backing from the European Stability Mechanism and Eurogroup officials, who stress the importance of reducing reliance on foreign-denominated stablecoins for financial transactions. Furthermore, the ongoing digital euro project, expected to roll out by 2029, could significantly enhance Europe’s monetary independence.

**Looking Ahead**

As the digital finance landscape evolves, stablecoins are set to play an increasingly influential role in shaping global monetary policies. The ECB remains focused on managing the associated risks, striving to preserve the eurozone’s financial stability in the face of these innovations.

The interaction between traditional banking systems and digital assets like stablecoins will be a defining factor for Europe’s next phase of economic policy. Policymakers continue to adapt, aiming to harness the benefits of digital finance while safeguarding the region’s economic future.
https://coincentral.com/olaf-sleijpen-warns-stablecoins-may-force-ecb-to-rethink-rates/

general

Major privacy laws – including GDPR – could be downgraded to try and boost AI growth and cut red tape

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**European Proposal to Amend GDPR and Privacy Laws Expected Soon**

New developments suggest that anonymized data may no longer always be protected under current privacy regulations, marking a significant shift in European data protection policies.

According to documents obtained by Politico, the European Union is considering easing some privacy laws, including the General Data Protection Regulation (GDPR), to enhance European competitiveness and foster AI innovation. A major proposal, expected to be unveiled on November 19, 2025, could introduce a comprehensive ‘digital omnibus’ package aimed at simplifying technology laws across the region.

### Potential Changes to Data Privacy and AI Training

If passed, these changes might allow AI developers to process certain sensitive categories of data—such as political views, religion, and health information—for training purposes. Politico reports that pseudonymized data (data from which personally identifiable information has been removed) might no longer always be protected under GDPR. This could enable its broader use in AI training models.

Additionally, websites and apps could be granted wider legal grounds to track users beyond the usual consent requirements.

Despite these shifts, the proposed amendments are said to be “targeted” and technical, potentially leaving the core principles of GDPR intact. However, any modification to these relatively new and stringent privacy laws is likely to face significant political scrutiny.

### Opposition and Support Within Europe

Jan Philipp Albrecht, one of the architects of GDPR, has voiced strong concerns over the proposed changes, warning they could “[undermine] European standards dramatically.” He questioned whether this signals “the end of data protection and privacy as we have enshrined it in the EU treaty and fundamental rights charter.”

Several countries, including the Czech Republic, Estonia, France, Austria, and Slovenia, have already expressed opposition to rewriting GDPR. On the other hand, Germany appears to support the proposed changes, while Finland has indicated openness to modifications that would boost European AI competitiveness.

### The Global Context

On a global scale, the EU’s strict data protection measures have been criticized for potentially holding Europe back in the race for AI development, especially compared to the rapid advancements seen in the United States and China.

European privacy regulators have previously delayed or blocked AI initiatives from major players like Meta, Google, and OpenAI to ensure compliance with existing laws. This ongoing tension highlights the delicate balance between innovation and privacy protection within the EU.

### What’s Next?

The European Commission has not yet made any official announcements regarding changes to GDPR or other privacy regulations. However, with expectations mounting for new proposals in the coming days, vigorous discussions are already underway—both in favor of and against potential reforms.

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https://www.techradar.com/pro/major-privacy-laws-including-gdpr-could-be-downgraded-to-try-and-boost-ai-growth-and-cut-red-tape

economy, politics

Destroying Europe in order to save it: Extortion, theft, and the EU’s two disastrous choices

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Europe can postpone recognition of failure, but it cannot postpone the bill.

Europe now faces a stark choice forced by its disastrous war policy against Russia: either allow the EU to successfully move toward a centralized state over the heads of its member states, risking a mass Eurexit that may or may not succeed in reaction to that gamble, or delay the larger crisis through member states quietly accepting one of several schemes that will cripple the economy and create social strife regardless.

The Union must decide whether to use frozen Russian sovereign assets to finance a €140 billion “reparation” loan for Ukraine, or to issue joint debt through Eurobonds. Both paths carry severe legal risks and impose heavy costs on citizens: one through contingent liabilities, the other through immediate taxes, austerity, and political instability.

Pushing through the Eurobond option would amount to a structural coup, a radical re-engineering of the EU against its current form. A recent…
https://www.sott.net/article/502868-Destroying-Europe-in-order-to-save-it-Extortion-theft-and-the-EUs-two-disastrous-choices

general

Italy backs the digital euro but asks ECB to spread out high implementation costs

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Italy’s Banking Sector Backs ECB’s Digital Euro Initiative Amid Cost Concerns

Italy’s banking sector has expressed strong support for the European Central Bank’s (ECB) proposed digital euro project, seeing it as a vital step to retain Europe’s digital sovereignty and reduce dependence on non-European payment providers like U.S.-based card networks and stablecoins.

While enthusiastic about the digital euro initiative, Italian banks are also advocating for a flexible, long-term payment plan to manage the substantial implementation costs. They have described these costs as “very high,” especially when considering other ongoing capital expenditures.

“We’re in favor of the digital euro because it embodies a concept of digital sovereignty,” ABI General Manager Marco Elio Rottigni said on Friday. “Costs for the project, however, are very high in the context of the capital expenditure banks must sustain; they could be spread over time.”

**Italy’s Support Comes With a Caveat**

The primary purpose of the digital euro, the ECB’s digital version of the single currency, is to strengthen the euro area’s monetary sovereignty while reducing reliance on non-European payment service providers and addressing the rise of stablecoins.

However, the legislative process has been slow due to opposition from some French and German banks. These banks are concerned that millions of Europeans might switch to using an online ECB wallet for daily payments, which could lead to a significant outflow of deposits from traditional banks.

Despite this opposition, the ECB’s Governing Council has advanced the digital euro project to its next phase after completing a two-year preparation period.

“We’re in favor of a twin approach: a central bank digital currency alongside commercial bank digital currencies, which may develop faster,” Rottigni explained. “What Europe shouldn’t do is fall behind.”

The digital euro launch is expected in 2029, following a pilot phase anticipated to begin in 2027, contingent upon the adoption of EU legislation expected in 2026.

Meanwhile, European Parliament member Fernando Navarrete of Spain’s Partido Popular, responsible for the parliament’s assessment of the digital euro, submitted a draft report on October 28 promoting a scaled-down version of the scheme. The report advocates safeguarding private payment initiatives such as Wero, which is backed by 14 European lenders. This stance highlights that, while generally supportive, some parliamentary voices seek established safeguards against potential financial strain.

**Global CBDC Developments**

While the introduction of central bank digital currencies (CBDCs) presents systemic risks—including potential cyberattacks and digital bank runs, which require robust governance and security—several countries are moving forward.

China has been preparing its CBDC for years and, as of 2025, has deployed its digital yuan in eighteen countries, including Thailand, Kazakhstan, and the United Arab Emirates. Observers view these efforts as attempts to maintain monetary sovereignty.

Other notable CBDC initiatives include:

– **United Kingdom’s Britcoin**: Currently limited to sandbox testing.
– **Japan’s Digital Yen**: Intended as an alternative to China’s digital yuan but advancing cautiously.
– **Sweden’s e-Krona**: An open-source digital currency with partial anonymity for small payments, currently in testing.
– **Brazil’s DREX**: Designed to integrate with smart contracts for social assistance programs, promoting financial inclusion.

In contrast, U.S. legislative efforts are focused on regulating private stablecoin issuers rather than issuing a CBDC. The Federal Reserve is barred from creating its own CBDC due to concerns over monitoring and surveillance risks.

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https://bitcoinethereumnews.com/finance/italy-backs-the-digital-euro-but-asks-ecb-to-spread-out-high-implementation-costs/