Trump's Bitcoin and Cryptocurrency Moves Panic the European Central Bank! MICA Call Has Come!

The USA is showing a moderate approach towards Bitcoin (BTC) and the cryptocurrency sector with Donald Trump’s presidency.

The support given to cryptocurrencies by the US under Trump moved the European Central Bank (ECB) into action.

According to a report by Politico, the ECB warned that Trump’s and the US’s support for cryptocurrencies could pose financial risks for Europe and called for changes to the MiCA rules.

The ECB’s concern is focused on the potential that U.S. reforms supported by Trump could flood European markets with dollar-based stablecoins. At this point, the ECB is worried that this situation could lead to a flight of European capital to U.S. assets, undermine the EU’s financial sovereignty, and expose banks to liquidity risks.

As MiCA restricts the issuance of foreign currency-backed stablecoins, two new draft laws in the US –STABLE and GENIUS– aimed at significantly expanding the access to dollar-backed stablecoins are troubling the ECB. Therefore, the ECB fears that it may not be strong enough to counter the effects of MiCA.

As the ECB expresses concerns about economic risks in the European Union, the European Commission dismissed the warnings as exaggerated, claiming that the current regulations are sufficient.