The discussion surrounding the digital euro is strategically important to Europe. On Dec. 12, the EU finance ministers are aiming to agree on a general approach regarding the dossier. This sets out the European Council’s official position and thus represents a major political milestone for the European Council ahead of the trilogue negotiations. We want to be sure that, in this process, the project will be subject to critical analysis that is objective and nuanced and takes account of the long-term interests of Europe and its people. > We do not want the debate to fundamentally call the digital euro into question > but rather to refine the specific details in such a way that opportunities can > be seized. We regard the following points as particularly important: * maintaining European sovereignty at the customer interface; * avoiding a parallel infrastructure that inhibits innovation; and * safeguarding the stability of the financial markets by imposing clear holding limits. We do not want the debate to fundamentally call the digital euro into question but rather to refine the specific details in such a way that opportunities can be seized and, at the same time, risks can be avoided. Opportunities of the digital euro:  1. European resilience and sovereignty in payments processing: as a public-sector means of payment that is accepted across Europe, the digital euro can reduce reliance on non-European card systems and big-tech wallets, provided that a firmly European design is adopted and it is embedded in the existing structures of banks and savings banks and can thus be directly linked to customers’ existing accounts. 2. Supplement to cash and private-sector digital payments: as a central bank digital currency, the digital euro can offer an additional, state-backed payment option, especially when it is held in a digital wallet and can also be used for e-commerce use cases (a compromise proposed by the European Parliament’s main rapporteur for the digital euro, Fernando Navarrete). This would further strengthen people’s freedom of choice in the payment sphere. 3. Catalyst for innovation in the European market: if integrated into banking apps and designed in accordance with the compromises proposed by Navarrete (see point 2), the digital euro can promote innovation in retail payments, support new European payment ecosystems, and simplify cross-border payments. > The burden of investment and the risk resulting from introducing the digital > euro will be disproportionately borne by banks and savings banks. Risks of the current configuration: 1. Risk of creating a gateway for US providers: in the configuration currently planned, the digital euro provides US and other non-European tech and payment companies with access to the customer interface, customer data and payment infrastructure without any of the regulatory obligations and costs that only European providers face. This goes against the objective of digital sovereignty. 2. State parallel infrastructures weaken the market and innovation: the European Central Bank (ECB) is planning not just two new sets of infrastructure but also its own product for end customers (through an app). An administrative body has neither the market experience nor the customer access that banks and payment providers do. At the same time, the ECB is removing the tried-and-tested allocation of roles between the central bank and private sector. Furthermore, the Eurosystem’s digital euro project will tie up urgently required development capacity for many years and thereby further exacerbate Europe’s competitive disadvantage. The burden of investment and the risk resulting from introducing the digital euro will be disproportionately borne by banks and savings banks. In any case, the banks and savings banks have already developed a European market solution, Wero, which is currently coming onto the market. The digital euro needs to strengthen rather than weaken this European-led payment method. 3. Risks for financial stability and lending: without clear holding limits, there is a risk of uncontrolled transfers of deposits from banks and savings banks into holdings of digital euros. Deposits are the backbone of lending; large-scale outflows would weaken both the funding of the real economy – especially small and medium-sized enterprises – and the stability of the system. Holding limits must therefore be based on usual payment needs and be subject to binding regulations. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Bundesverband der Deutschen Volksbanken und Raiffeisenbanken e.V. , Schellingstraße 4, 10785 Berlin, Germany * The ultimate controlling entity is Bundesverband der Deutschen Volksbanken und Raiffeisenbanken e.V. , Schellingstraße 4, 10785 Berlin, Germany More information here.

BRUSSELS — The head of Wall Street’s top watchdog is “absolutely not” concerned about the body’s independence from the White House. Securities and Exchange Commission Chair Paul Atkins told POLITICO in an interview that President Donald Trump has the power to oust the head of the body and its commissioners. “It’s clear from the law and Supreme Court rulings that we’re part of the executive branch and the president can fire me and the other commissioners,” he said. “He’s [Trump] the head of the executive branch. So I think that goes without saying.” His comments come amid Trump’s repeated attacks on the head of the Federal Reserve, Jerome Powell, as well as his attempts to fire Lisa Cook, a member of the board. Asked whether he has concerns about the SEC’s independence, Atkins said: “No. Absolutely not.” But, he added: “As far as the SEC goes,” he is “confident we could do our job as we have been doing it now for 90 years.” Atkins declined to provide an opinion on Trump’s attacks on Powell — the president has described the Fed chair as a “moron” and a “numbskull” — saying: “That’s another agency altogether. They can — Jay Powell and the president — work out those sorts of things.” CRYPTO RESERVE Atkins praised Trump for his plans to set up a strategic Bitcoin reserve and digital assets stockpile following a presidential executive order. “The U.S. government has seized a lot of Bitcoin and other things. … I think it’s smart not to dump it on the market, frankly, and so I salute the efforts of the president and the Treasury Secretary [Scott Bessent] and others to address that issue.” The SEC chair has unveiled an ambitious agenda for stablecoin regulation known as “Project Crypto,” which he described as a move away from a “head-in-the-sand” approach from the regulator toward the digital technology. “The SEC needs to embrace change. And if you do the opposite … if you are not embracing it, then it goes offshore,” he said, citing the example of FTX, the crypto exchange which was headquartered in the Bahamas and collapsed in 2022. GREEN STANDARDS Atkins has made his dislike of EU rules for corporate sustainability reporting clear, criticizing them in a speech in Paris earlier this week. He has also threatened to withdraw U.S. recognition of international accounting standards over the inclusion of sustainability in their methodology. Asked whether he disagrees with the European Central Bank’s approach of factoring the risks posed by climate change into their policymaking, Atkins said: “Yes, in a word.” “We’re not here to be environmental police or social police or whatever. That’s not our job. And if others want to do that, then that’s up to them,” he said. Atkins said “it doesn’t matter what I believe” regarding his personal views on climate change, adding that the SEC’s position “long before me” was that climate change does not pose a risk to the orderly functioning of financial markets. “I’m just continuing with that. I agree with that position,” he said. ENFORCEMENT AGENDA Separately, Atkins defended the appointment of Meg Ryan, a judge, to the role of head of the SEC’s enforcement division. Her hire broke with a precedent of appointing someone with long experience in securities law. But Atkins said critics are “people who are ignorant, frankly, of how things work.” “Judges don’t come ready-made with knowledge of the securities world,” he said, adding that Ryan is “eminently qualified to take this position.” Judges “learn it on the job, they apply their experience and their knowledge to the case at hand, and they study up and they’re smart people and that’s their job,” Atkins said.

The European Central Bank is preparing for its new digital version of the euro to take the payments market by storm — even though much of the public is unsure it wants anything to do with it. Internal ECB documents show the bank wants the digital euro system to be able to handle more than 50 billion transactions a year from the get-go, central bank officials told POLITICO. Such massive capacity suggests that ECB expects the digital currency to transform the retail payments market, pressuring a key revenue stream for current payment providers: If run at maximum capacity, the digital euro could snatch more than a third of the transactions currently done by payment cards. According to a presentation to the ECB’s governing council by the bank’s digital euro team last month, it needs a system that can handle 50.5 billion transactions annually, two officials said. While that is neither a target nor a forecast, it’s still a striking statement of confidence in the project’s potential. For context, payment cards were used in 84.6 billion transactions worth a total of €3.2 trillion across the eurozone last year, with card issuers and associated services providers taking a commission on most of them. Assuming annual growth of 10 percent as cash continues to lose ground, there could be close to 125 billion card transactions in 2028 — the year currently seen as the earliest possible launch date for the digital currency. At full capacity, the digital euro would thus have a market share of around 40 percent. A large part of payment fees currently goes to companies such as Visa and Mastercard and other fintech firms located outside Europe. The ECB wants the digital euro not just to stop such leakage, but to end Europe’s technological reliance on the infrastructure of U.S. payment giants more broadly, fearful of the shifting geopolitical environment. A whopping two-thirds of card transactions in the euro area are currently settled through international payment schemes and more than half of EU countries rely entirely on non-European solutions. The ECB has never publicly shared any estimates of what market share it expects the digital euro to take, but has always stressed that it has no plans to crowd out private-sector alternatives. The numbers in the presentation suggest the private sector may feel very squeezed. The ECB declined to comment. TAKING OVER, OR NO TAKERS? If the planning for broad and rapid adoption is accurate, consumers may see lower prices and Europe may bolster its strategic autonomy — but the region’s payments providers may see less reason to cheer. Industry bodies such as Payments Europe have warned the digital euro could wreck card-based revenue models, especially if its basic services are offered for free. Widespread use of the digital euro in transactions also suggests that consumers will opt to hold them in electronic wallets, draining deposits from the banking system. Bankers say that could limit the amount they have available to lend to households and business. “The impact on savings and retail banks of the digital euro taking a big chunk of card transactions will depend on the holding limits the ECB imposes, and [on] the underlying business model of the digital currency,” said Diederik Bruggink, senior director of payments, digital finance and innovation at the European Savings and Retail Banking Group. The higher the holding limits allowed for the digital euro and the lower the fees for payments between service providers, the worse it will be for banks, he explained. A large part of payment fees currently goes to companies such as Visa and Mastercard and other fintech firms located outside Europe. | Luong Thai Linh/EPA According to European Banking Authority estimates, fees and commissions account for around 30 percent of net operating income at the continent’s banks, and payment-related fees account for more than a quarter of that. The ECB has argued that the digital euro could offer fresh business opportunities for domestic service providers that are finding it increasingly difficult to compete with international card schemes and mobile payment solutions. Not only can banks serve as wallet providers and create other add-on services, but by embedding digital euro services, banks can retain customers who might otherwise migrate to Big Tech wallets, it argues. The question is whether the public can bring itself to care. After a slow start, recent surveys show awareness and interest may be taking off. A survey by consultants BearingPoint in February showed one-third of respondents across the eurozone would be willing to use the digital euro, a share that seems likely to rise with generational change. But a survey by Payments Europe showed that 56 percent of consumers today are unsure whether they ever would. While no decision on launching a central bank digital currency can be taken without legislation from the European Parliament, the project’s technical development continues to gather momentum. In the same presentation, the digital euro team argued that, should all legislative hurdles be cleared, the ECB governing council should approve close to €1.5 billion to bring the project to life.

PARIS — France isn’t getting rid of cash, Justice Minister Gérald Darmanin clarified on Friday after telling lawmakers a day earlier that the move would help stop drug trafficking. In an interview with radio station RTL, Darmanin recognized that getting rid of banknotes was unpopular and that the government lacked the “political means” to take a move that would significantly affect the everyday lives of millions of people. Darmanin said a debate on the future of cash would require “a lengthy discussion with French people,” especially to address the concerns of small businesses and older citizens. The 42-year-old added that a presidential campaign — which he is already laying the groundwork for ahead of the 2027 contest — could be the right avenue for such a discussion. A 2023 senatorial report estimated that illegal drug trafficking in France is worth between €3.5 and €6 billion yearly, and that most of this revenue comes from “small daily purchases using small banknotes.” The French state only recovers a few million euros of that amount each year, Darmanin said, adding that other forms of payment —included cryptocurrency — are easier for investigators to track. The right-leaning justice minister, who spent years as interior minister before taking on his new role last December, has long advocated tough-on-crime policies. In the same RTL interview, he also backed the use of facial recognition technology in public spaces to identify individuals wanted by the police.

PARIS ― French Interior Minister Bruno Retailleau is organizing an emergency meeting with cryptocurrency entrepreneurs in the country to discuss their security after a brazen kidnapping attempt on Tuesday. “I will be bringing together at Beauvau [France’s interior ministry] the cryptocurrency entrepreneurs, there are a few in France, to work with them on their security, to make them aware of the risks, and to take together measures to protect them,” Retailleau said in an interview with French media Europe1/CNews Wednesday. On Tuesday, four people attempted to abduct a woman and her son off the street in broad daylight but were stopped thanks to the quick work of those nearby. Much of the ordeal, which took place in Paris’ 11th arrondissement, was caught on camera. French media reported that the victims were the daughter and grandson of the CEO of French cryptocurrency platform Paymium. Retailleau said this was the third case of an attempted or successful kidnapping involving the relatives of crypto bosses this year, and that all of them are likely linked. Ledger cofounder David Balland was abducted in January and the father of another crypto entrepreneur was kidnapped earlier this month. The kidnappers in both of those cases reportedly cut a finger off of their victims to obtain a ransom before releasing them a few days later. Retailleau said the assailants in the early May case also threatened to pierce their victim’s knee with a drill.

BRUSSELS — Battle lines are being drawn between the European Central Bank and the European Commission over whether landmark rules to govern crypto currencies are strong enough to withstand the full force of Donald Trump. The ECB thinks the U.S. president’s lavish support for the American crypto sector risks causing financial “contagion” that could blow up the European economy, according to a policy paper seen by POLITICO. It is demanding an urgent rewrite of laws brought fully into force only four months ago. But in a rebuff, the Commission dismissed the Bank’s alarmist analysis, signaling that it had misunderstood the EU’s own rules, and hit back at what it saw as an unwelcome intrusion into lawmaking. The argument sheds light on how jittery financial policymakers generally are about moves by the Trump administration to “expand the reach of the dollar” via complex financial technology. European officials fret that several major financial market reforms the U.S president has touted will undermine efforts to become strategically independent as the EU tries to revamp its financial sector. They worry it will prompt a flight of assets to the U.S. and entrench fresh risks in the system. This specific clash is about the Markets in Crypto Asset Regulation (MiCA), a landmark law passed in 2023 and heralded as the first regulation worldwide to introduce strong safeguards and consumer protections for cryptocurrency firms. Cryptocurrencies ― digital currencies that can be bought, sold and traded online ― look like being given a new lease on life under Trump, after the industry pumped billions of dollars into his election campaign. STABLE, GENIUS At the heart of the recent scuffle is anxiety regarding a popular kind of a cryptocurrency known as a “stablecoin,” which emulates the stability of major currencies like dollars and euros, unlike more volatile cryptocurrencies like Bitcoin. The majority of these stablecoins are denominated in dollars, and in some countries are already used as an easily accessible alternative to the greenback when local currencies are unreliable. Governments fear they could replace traditional money, undermining national sovereignty and leaving citizens vulnerable to the fortunes of a business with a penchant for disastrous meltdown. In theory, MiCA reduces the risk of foreign-currency-backed stablecoins disrupting the European economy by limiting who can issue them and how much can be issued, while still allowing EU citizens to use them.  But planned reforms in the U.S., including a White House executive order and the drafting of two laws — dubbed STABLE and GENIUS — extend the reach of the American stablecoin industry, with one analysis by British bank Standard and Chartered predicting the supply of dollar-backed tokens could hit $2 trillion by 2028, up from $240 billion today. This has prompted panicked warnings from ECB President Christine Lagarde and its digital payments czar Piero Cipollone. In recent months, both top officials have suggested that the MiCA rules are not strong enough to withstand the effects of a turbocharged U.S. stablecoin industry, worrying that a flood of dollar-denominated assets into Europe could reroute European savings into the U.S. On Thursday, Lagarde said MiCA would have to change, and implied that the unique threat posed by stablecoins was “understood” by the Commission and other EU institutions.  But Lagarde’ s audience did not know that her words came after an acrimonious exchange of barbed research papers earlier this month, which POLITICO can now reveal. FUNDAMENTAL MISREADING The drama began on April 14 when the top financial service officials of EU governments met to discuss the impact of U.S. crypto assets on EU financial stability. Both the central bank and the EU’s executive circulated their own papers on the subject, underscoring the chasm between the institutions’ views on the risks coming from Washington.  The ECB argued that the regulation needs a serious rethink, warning it was  too permissive toward the “multi-issuance” model, in which Europe-based stablecoin issuers pool their resources with issuers in third countries, according to the document. ECB President Christine Lagarde said MiCA would have to change, and implied that the unique threat posed by stablecoins was “understood” by the Commission and other EU institutions. | Kirill Kudryavtsev/AFP via Getty Images The gulf between the institutions’ views turned into a clash during the meeting as EU officials and most governments pushed back against the central bank, according to two diplomats and one EU official, who were granted anonymity to speak freely about private talks.  “The Commission was quite clear that they had different views on this topic” and “not very many [countries] supported the idea that we should now jump the gun and start making quick changes  in [the rules] based on this alone,” one of the diplomats said. The EU official suggested that the ECB’s paper was based on a fundamental misreading of the MiCA regulation, which, the official said, had been designed explicitly to resolve the issues mentioned by the ECB. The official added that it made “no economic sense” for U.S. users to impose redemption requests on European issuers, and that the idea of a traditional “run” on an asset backed one-to-one was “nonsense.” The official also claimed the ECB has recently been hyping the stablecoin menace to bolster political support for its controversial digital euro project, an effort to build a pan-European payment system that, it says, would shield Europe’s financial infrastructure from crypto-assets. Stablecoins denominated in dollars, which are backed primarily by U.S. treasuries, account for 99 percent of the $240 billion market, according to Frankfurt. The central bank fears that allowing dollar-backed stablecoin issuers to offer their product in both the U.S. and the EU could also favor “existing non-EU stablecoin issuers who have already established an oligopolistic market position,” and could trigger a flood of EU investment in U.S. debt, undermining the bloc’s plans to strengthen its own financial market.  In the worst-case scenario, the ECB argued, EU issuers could be forced to redeem foreign-held tokens as well as European ones, risking a “run” on their reserves if either are found to be insolvent and potentially having a knock-on effect on exposed banks.  In its own paper, also seen by POLITICO, the Commission forcefully defended the effectiveness of the rules, even taking into account the planned U.S. reforms, hinting that the central bank was being melodramatic. “The risks arising from such global stablecoins seem to be overstated and are manageable under the existing legal framework,” the Commission said in the document. The EU executive argued that it was still “too early” to judge what effect the U.S. crypto resurgence would have on EU markets. In any case, it said, the MiCA rules already require crypto asset providers to adhere to stricter criteria to operate in the EU market — and have already forced some major players to delist their stablecoins, including the well-known Tether, from exchanges. The Commission acknowledged, however, that those rules do require enforcement.  Still, the EU executive also noted that only a single global stablecoin has been authorized under the new rules so far. The bill allows the central bank itself to block such issuers from operating if “they pose a threat to smooth operation of payment systems, monetary policy transmission or monetary sovereignty,” it said. Rules for banking already offer protection against potential contagion, while redemption rights can be limited to EU holders only, it said.

LONDON — British Cabinet minister Lucy Powell’s official X account was hacked Tuesday to promote a fake cryptocurrency. The leader of the House of Commons’ account posted a tweet falsely advertising a “House of Commons Coin ($HCC),” claiming it was “a community-driven digital currency bringing people’s power to the blockchain. “Transparency. Participation. Trust,” the tweet added. A separate post said the “official crypto coin” was now live, and shared details to a contact address. Both tweets were subsequently deleted. A spokesperson for Powell said: “Lucy Powell’s personal X account was hacked this morning. Steps were taken quickly to secure the account and remove misleading posts.” A spokesperson for the U.K. Parliament said it “takes cyber security extremely seriously. We provide advice to users — including members — to make them aware of the risks and how to manage their digital safety, however we do not comment on specific details of our cyber security policies.” Powell is not the first political figure to fall victim to hackers promoting crypto. BBC journalist Nick Robinson’s X account was hacked in February and fictionally stated he was launching a cryptocurrency for Radio 4’s Today program, which he co-presents. Fellow BBC presenter and former political editor Laura Kuenssberg’s X account was also hacked in January as the impersonator promoted BBC “memecoins” as possibly “the next big face of digital finance.” Mason Boycott-Owen and Esther Webber contributed reporting.

BRUSSELS ― The policies of U.S. President Donald Trump have given Europe a window of opportunity to fulfill a long-held dream of challenging the dollar’s supremacy in global finance, according to European Central Bank leader Christine Lagarde. Speaking to EU leaders during a summit on Thursday, Lagarde said a single EU financial market can attract investors searching for alternatives to the dollar and U.S. financial markets, according to an EU diplomat and an EU official aware of the talks behind closed doors. Lagarde reportedly drew attention to recent trends in global financial markets, notably a tendency of foreign investors not to reinvest money in U.S. Treasury bonds as their existing holdings mature. Net purchases of Treasuries by foreign investors have fallen well short of expectations this year and turned negative in January for only the second time in over four years. Analysts have commented that investors are unsettled both by Trump’s willingness to launch a trade war and by his intention to make a temporary tax cut permanent at a time when U.S. public finances are on an unsustainable trajectory. Trump’s enthusiastic embrace of cryptocurrency has also raised questions about his long-term plans for the dollar. At the same time, however, Trump’s encouragement of private digital currencies linked to the dollar, so-called stablecoins, may expand and entrench the greenback’s dominance, European Stability Mechanism head Pierre Gramegna said last week. Both Gramegna and the ECB see this as a potential threat to Europe’s own monetary sovereignty. Jacopo Barigazzi contributed to this report.

Controversy over President Donald Trump’s creation of a “strategic bitcoin reserve” and a “digital asset stockpile” is creating a new potential headache for Republicans who are working to advance a slate of industry-friendly legislation. Democrats — and even some industry players themselves — are skeptical of Trump’s plan, announced in an executive order late Thursday, to have the federal government create reserves of crypto tokens, saying it could be used to pick winners and losers in the industry. The proposal comes just weeks after Trump and some of his family members launched their own memecoins just prior to his inauguration. Republicans on Capitol Hill are gearing up to quickly advance long-sought changes that would overhaul how digital assets are regulated and grant the industry a new stamp of legitimacy from Washington. Bipartisan support is needed for any crypto legislation to clear the Senate and become law. And while many Democrats have gotten on board with the pro-crypto push, they say proposals like the crypto reserve are undermining their legislative efforts. “This is just the wet dreams of the crypto bros, and it’s a bad idea,” Rep. Jim Himes (D-Conn.), a senior Democrat on the House Financial Services Committee who has supported industry-backed crypto legislation, said before Trump signed the executive order setting up the reserve and stockpile. “Trump coins and Melania coins and strategic reserves — that’s just all a distraction that’s going to make it, I think, harder for the Congress to come around on what could be an innovative technology.” House Financial Services Chair French Hill, whose panel is at the center of digital asset legislation, said he supports Trump’s vision to make the U.S. a leader in the industry, but stopped short of outright endorsing the order. “As President Trump works to implement this Executive Order, I encourage his administration to collaborate with Congress, particularly in regard to the structure and any funding related to the Strategic Bitcoin Reserve,” the Arkansas Republican said in a statement on Friday. The announcement of the executive order came ahead of a White House summit set for Friday on crypto policy that will feature a range of the industry’s top executives. The pushback and caution illustrates how fractures over Trump’s actions from within the crypto industry and among crypto-friendly lawmakers could complicate efforts to enact policies benefiting digital asset firms. It also highlights how Trump’s endorsement of ideas once relegated to the fringes of the crypto community could jeopardize broader efforts by policymakers to legitimize the $3 trillion market. Earlier this week, when Trump pitched the idea of a reserve that would include a wide array of tokens, the concept was widely criticized in Washington and in the industry — in part over concerns that the federal government was about to become a major player in the crypto market. Ultimately, however, the White House didn’t go that far. Instead, Trump signed the executive order authorizing the U.S. government to formally stockpile its already-seized bitcoin in the so-called strategic reserve. The White House’s crypto and artificial intelligence czar, David Sacks, equated it to a “digital Fort Knox” as bitcoin — the original crypto token — is often labeled “digital gold.” In addition to the bitcoin reserve, the order sets up a “U.S. Digital Asset Stockpile” that will contain other types of crypto tokens that the government seizes. No taxpayer dollars will be used to acquire bitcoin for the reserve, according to the White House. The executive order also states that the stockpile will only include assets that are acquired through forfeiture seizures and penalties. The price of bitcoin plummeted immediately following the announcement, but the stockpile could be a long-term boon for the asset. “The market was expecting a more aggressive EO,” said Nic Carter, a Trump supporter who is a founding partner at a crypto-focused venture capital firm, Castle Island Ventures. “Long term, I think it’s very, very positive for bitcoin. The U.S. government just ratified it, basically, as a global asset of consequence.” Carter, who criticized Trump’s initial announcements over the weekend about the crypto stockpile, said the order was “cleverly written.” He said that setting up a “structure for seized bitcoin is fine,” but he is opposed to the government stockpiling non-bitcoin crypto assets and “very against” acquiring bitcoin through any means aside from law enforcement seizure. A one-time crypto skeptic, Trump eagerly embraced the crypto industry while on the campaign trail last year as firms came under mounting legal pressure from former President Joe Biden’s financial regulators. His regulators have since begun to pull back from the federal government’s sweeping crackdown of crypto companies, while Trump and the White House have started rolling out various policy proposals like the reserve that stand to be major windfalls for the industry. But Congress holds the keys to the crypto industry’s biggest lobbying goals — a new, light-touch regulatory framework that divvies up oversight of digital assets between regulators — and bipartisan support is needed to clear the Senate. Many Democrats are supportive of pro-crypto legislation, but they say Trump’s moves on the memecoin and bitcoin reserve are undermining efforts to legislate on the issue. “There’s a danger that the excesses of the Trump administration could discredit the technology,” said Rep. Ritchie Torres, a pro-crypto New York Democrat who co-leads a new bipartisan congressional digital asset caucus. Sen. Ruben Gallego of Arizona, the top Democrat on a Senate Banking Committee subpanel on digital assets, said Monday that the move “deteriorates the effort that a lot of us are doing to make cryptocurrency more mainstream, more legitimate and something that people will understand instead of fearing.” First floated last summer, the reserve was originally pitched by Trump as a stockpile of bitcoin that the federal government has seized over the years. Yet, over the weekend, Trump opened the door for a wider array of tokens to be included — such as ether, Ripple’s XRP and Solana — setting off the wave of industry and lawmaker concern. “There’s a huge difference of opinion within the industry” about the reserve, said Blockchain Association CEO Kristin Smith, who added that the industry’s policy focus right now lies on legislation for the regulation of so-called stablecoins and a bill to set up how Wall Street regulators police the market. “The idea of a reserve has been floated many, many times, and I think it’s something that people are open to having a debate about,” Smith said prior to the executive order’s signing. “But in the broader scheme of the whole industry, it’s not the top priority at this time.” Smith on Friday said the order “further demonstrates President Trump’s commitment to maintaining — and growing — America’s leadership in crypto innovation and financial technology.” Others still have questions, such as how the bitcoin reserve would go about acquiring further tokens. In the order, the White House said Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick will develop strategies for obtaining more bitcoin “provided that such strategies are budget neutral and do not impose incremental costs on United States taxpayers.” But it’s unclear what exactly that could entail. Hilary Allen, a law professor at American University who is a staunch crypto critic, said open-market purchases of any token are likely out of the question. That’s because any time the U.S. bought or sold a crypto token, Allen said, it would be available in real time for all to see — meaning that the government could wind up paying higher prices in the process of buying tokens and could risk a major selloff when it cashes out. “It’s purely supply and demand dictating the value. So, if you have an extremely large bag holder like a crypto reserve start to sell, that would undermine its ability to usefully pay for things,” Allen said, before adding “we don’t put poker chips in reserves.” Still, some of Trump’s allies have defended the idea. Rep. Byron Donalds (R-Fla.) said the reserve is “great.” “It’s something we should be looking at,” Donalds said. “We should be looking at holding anything that has a real repository of value — bitcoin, in particular, but there are other coins out there that do have legitimate value.”

BRUSSELS — The man leading the Parliament’s work on the digital euro, who had become one of its fiercest critics, has stepped down to quell suspicions he was purposefully derailing the legislation. Stefan Berger, who is part of fellow German Commission President Ursula von der Leyen’s center-right EPP party, said he didn’t want the German center-right suspected of slowing down work on the sensitive file, which aims to implement a eurozone single digital currency. “It’s time for someone [who] is not coming from Germany and is not under suspicion that he wants to delay” the talks,” Berger, a veteran Christian Democratic Union politician, told POLITICO while announcing his resignation. Markus Ferber (another German) who is the center-right coordinator for economic files, will determine Berger’s replacement within the next week. Among the names being floated to fill the role is a former Spanish central banker Fernando Navarrete Rojas. The digital euro is a virtual counterpart to euro coins and banknotes that the European Central Bank hopes will enhance domestic eurozone payments while unshackling the bloc from foreign providers such as Visa and Mastercard. The EU Commission views the project as essential for fulfilling its strategic autonomy mission. Awkwardly for von der Leyen, the stiffest resistance to the project has come from her homeland. Small German lenders, in particular, fear that the European Central Bank’s preferred design for a digital currency would suck savings out of their bank accounts undermining their ability to raise funding. But the idea is also unpopular with many German citizens, who are well known for going out of their way to use cash. Their long-running skepticism of digital payment systems, which they associate with surveillance and control, is sometimes seen as a historical hangover related to previous authoritarian abuse. Germany, representing the country’s powerful and extended network of cooperative banks, is now leading a group of countries raising concerns about the digital euro’s design. According to Berger, what banks fear most is that the digital euro could prompt customers to withdraw deposits very suddenly, sparking a destabilizing bank run on smaller lenders. “It’s no longer the money of the bank [after it is transferred],” Berger said, adding that the average deposit for a small German bank is about €3,000. Berger became increasingly sympathetic to such concerns and admitted that, overall, he had become convinced central bank control over digital infrastructure should be limited. He told POLITICO he wanted to put quality over speed of implementation to ensure such structural factors were accounted for, adding that the purely technological part of the file had been completed. To mitigate such issues, Berger recently explored the possibility of tweaking the digital euro’s design, limiting it as a first step to a so-called wholesale model governing transactions between the central bank and the banking industry. He thought that could be a way to calm everyone’s fears. “This was my idea, just reverse it, but the ECB … they don’t want [to], and the Commission said: ‘No, just make progress with this file’,” he said. A rival group of MEPs, unhappy with the progress of the file, asked Parliament coordinators even before Berger was reappointed to the role after this year’s elections, to ensure the lawmaker in charge during the next term would be committed to making progress. Socialists and Democrat, Renew and the Greens’ politicians specifically accused Berger of missing key deadlines and neglecting to organize meetings. His critics also claimed his actions, rather than accounting for the legitimate concerns of banks, were undermining the “democratic process”. The ECB and the Commission are both keen to speed up the legislative process, with von der Leyen tasking new Economy Commissioner Valdis Dombrovskis with making “quick progress” on it. Despite his own misgivings about the project, Berger agreed it was important for the reputation of the European People’s Party to show a willingness to cooperate. “The way is now open for constructive and positive negotiation without suspicion,” he said.  In response to news of Berger’s resignation, French Renew lawmaker’s Gilles Boyer said: “We should quickly resume our discussions.” Ben Munster contributed to this report.