Trump’s Crypto Comeback Spurs Italy Panic: Dollar Stablecoins Threaten Global Chaos

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Italy’s Central Bank Warns of Global Risks Amid Trump-Fueled Crypto Rally

Italy’s central bank has delivered a strong caution as the cryptocurrency market experiences a significant upswing, expressing concerns about potential global financial turbulence that could arise. The resurgence, largely driven by renewed political backing from U.S. President Donald Trump upon his reinstatement in office, has reignited optimism among digital asset investors.

You can find the first Semi-annual Financial Stability Report for 2025, which provides information about the conditions of the Italian financial system, here on the RSF (Italian Central Bank) website.

— Banca d’Italia (@bancaditalia) April 29, 2025

Trump’s Return Sparks Crypto Rally

Based on current findings, Bitcoin spearheaded a broad market rise following Donald Trump’s return to politics and his pro-cryptocurrency stance. His reappearance significantly contributed to the total crypto market capitalization reaching approximately $2.75 trillion by March, with Bitcoin holding more than 60% of that value.

As an analyst, I’m contributing to the ongoing momentum by discussing the recent announcement from Trump Media & Technology Group. They unveiled plans for a utility token and digital wallet, aiming to broaden their Truth+ streaming service. This action underscores the impression of a forward-thinking administration that is embracing the digital currency landscape.

Stablecoin Risks Could Trigger Market Shock

The Italian central bank is expressing worry over the increasing influence of stablecoins like USDT (Tether) and USDC (Circle), which are linked to U.S. Treasury securities. Authorities are cautious, as a large-scale withdrawal could potentially disrupt the stability of international bond markets.

The bank warned that if there are significant withdrawals, it might cause a ripple effect affecting not just the U.S., but also global financial markets.

EU Regulators Worry About Euro’s Future

Although the EU has enacted the MiCA Regulation (Markets in Crypto-Assets Regulation), Italian officials worry that this legislation may not be robust enough to curb the swift growth of crypto assets, particularly dollar-linked stablecoins. European Central Bank President Christine Lagarde shares similar concerns, suggesting that the dominance of the euro could diminish if the adoption rate of stablecoins persists at its current level.

Italy is advocating for stronger international collaboration to mitigate potential threats as cryptocurrency usage spreads beyond strictly controlled industries.

U.S. Oversight Also Under Scrutiny

As a researcher in this field, I’m observing an interesting shift in the regulatory landscape within the United States. It seems that certain pro-cryptocurrency officials have been appointed to key positions, potentially signaling a more favorable approach towards digital assets. Additionally, there appears to be a dismantling of a Justice Department unit that previously concentrated on investigating fraudulent activities related to cryptocurrencies. This could indicate a change in focus or priorities regarding the enforcement of crypto-related regulations.

In addition to the ongoing debate, it’s worth noting that Trump’s sons are backing a novel digital currency, which aligns with the progress of the GENIUS Act. This legislative bill, however, has raised concerns among critics as they believe it could potentially reduce crypto regulation and erode investor safeguards.

What’s causing Italy’s central bank to express concern about cryptocurrencies at the moment?

It stems from the current increase in crypto values, which is largely fueled by speculation and lack of strict regulation, potentially leading to financial instability.

Why is Italy showing unease towards stablecoins such as USDT and USDC?

It’s due to their connection with U.S. Treasuries. In the event of a massive sell-off, it could trigger global financial disruption.

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2025-04-30 11:12