French Central Bank Warns: Trump’s Embrace of Cryptocurrencies and Deregulation Has Sown the Seeds of a Financial Crisis
French central bank (Banque de France) Governor François Villeroy recently issued a warning regarding U.S. economic policies, stating that President Trump’s vigorous promotion of the cryptocurrency industry may be sowing the “seeds of a financial crisis.”
French Central Bank Warns of Economic Risks: U.S. May Commit “Negligence”
In an interview with the French newspaper La Tribune Dimanche, Villeroy expressed concern that the U.S. government’s support for the cryptocurrency industry, combined with relaxed regulations on non-bank financial institutions, could lead to future financial turbulence:
Financial crises often originate in the United States and then spread globally. The U.S. government’s encouragement of cryptocurrencies and non-bank financial institutions is planting seeds for future upheaval.
He also pointed out significant differences in financial regulation between Europe and the U.S., emphasizing that Europe’s regulatory framework is strong enough to protect the 27 EU member states from potential risks:
European banking will not face crises or risks because of this.
Historical Warnings: U.S. Has Triggered Multiple Financial Crises
Villeroy noted that historically, the U.S. has been the source of several financial crises, including:
- 1929 Wall Street Crash: Triggered the Great Depression worldwide
- 1973 OPEC Oil Crisis: The Organization of the Petroleum Exporting Countries (OPEC) halted oil exports to the U.S., causing market turbulence
- 2008 Financial Crisis: Resulted from the U.S. housing bubble burst and the collapse of the banking system
He warned that the financial and trade policies of the Trump administration could once again push the global economy to the brink of danger:
Trump seems to hold a mistaken view that the global economy is a zero-sum game.
ECB Voices Collective Criticism
It is noteworthy that this is not the first time Villeroy has publicly criticized Trump. Even before Trump’s inauguration, he described Trump’s trade wars and economic policies as “a tragedy for the U.S. economy”:
We sometimes hear about the lack of regulation regarding non-bank institutions, various funds, or crypto assets in the U.S., which could jeopardize financial stability.
He is not the only European official to criticize Trump’s policies; the President of the German central bank (Bundesbank), Joachim Nagel, recently stated that Trump’s economic policies resemble a “horror movie,” indicating that their impact should not be underestimated.
In response, Villeroy emphasized that Europe will continue to maintain strict financial regulations to ensure market stability.
Trump Intensifies Support for Cryptocurrency
Since returning to the White House in January, the Trump administration has continually expressed support for the cryptocurrency industry. This began with an executive order establishing a dedicated task force and appointing former PayPal executive David Sacks as the U.S.’s first “AI Crypto Czar.”
Additionally, the newly appointed acting head of the U.S. Securities and Exchange Commission (SEC), Mark Uyeda, has slowed or withdrawn multiple lawsuits against cryptocurrency companies such as Coinbase, Binance, and Robinhood.
Earlier this month, the Trump administration officially announced the establishment of a strategic Bitcoin reserve, cashing in on its long-promised political pledge to accumulate Bitcoin and other cryptocurrencies from criminal and civil forfeitures as national assets.
However, the previously mentioned inclusion of Ethereum (ETH), Solana (SOL), Cardano (ADA), and Ripple (XRP) has vanished without a trace and once again devolved into market manipulation rhetoric.
Tariff War Triggers Turbulence in U.S. Stock and Crypto Markets
Nevertheless, even with the most crypto-friendly government in U.S. history, Trump’s tariff policies have exacerbated market volatility. As concerns about a U.S. economic recession have intensified, the U.S. stock and cryptocurrency markets have seen significant declines in recent weeks. Wall Street investment banks JPMorgan and Goldman Sachs have raised their recession probability forecasts from 15% to 30% earlier this year to 20% to 40%, reflecting a serious erosion of investor confidence.
Risk Warning
Investing in cryptocurrencies involves high risks, and their prices can be highly volatile. You may lose all your principal. Please assess the risks carefully.
