- Trump's crypto embrace could spark another financial crisis, according to François Villeroy.
- Crypto markets have whipsawed amid the president's aggressive tariff threats.
President Donald Trump’s sweeping embrace of the cryptocurrency industry is “sowing the seeds” of a financial crisis.
That’s according to François Villeroy, the Governor of the Bank of France.
On Sunday, Villeroy said that by supporting the crypto industry and moving to deregulate entire sectors of the American economy, the country is erring on the side of negligence.
“Financial crises often originate in the United States and spread to the rest of the world,” Villeroy told the French outlet, La Tribune Dimanche. “By encouraging cryptocurrencies and non-bank finance, the US administration is sowing the seeds of future upheavals.”
He didn’t clarify exactly how that would happen. The Bank of France did not immediately respond to DL News' request for comment.
Villeroy said that European regulations are strong enough, however, to protect the 27-state bloc.
“There is no risk of a European banking crisis,” he added.
US crypto pivot
Boosting the crypto industry has been a key pillar of the Trump administration since he entered the White House in January.
He established a working group via an executive order in January and appointed David Sacks, a former PayPal executive, as the country’s first-ever crypto czar late last year to oversee the industry.
Meanwhile, the Securities and Exchange Commission under acting chair Mark Uyeda, whom Trump appointed in February, has dropped or delayed several high-profile lawsuits against crypto firms like Coinbase, Binance, and Robinhood.
“Donald Trump seems to harbor this false vision that the global economy is a zero-sum game.”
— François Villeroy, the Governor of the Bank of France.
First touted on the campaign trail at a Bitcoin conference in November, Trump has long teased the creation of a crypto stockpile, too.
On March 2, he said it would include four tokens in addition to Bitcoin, namely Ether, Solana, Cardano, and Ripple’s XRP.
These tokens rallied as investors bet the US government would go on a multi-billion dollar buying spree.
That stockpile has yet to manifest, however.
Crypto markets roiled
Indeed, the entire crypto market has been knocked hard by other aspects of Trump’s economic agenda, namely the administration’s bellicose tariff regime.
“We are indeed seeing great brutality on the American side,” Villeroy said. “Donald Trump seems to harbor this false vision that the global economy is a zero-sum game.”
When Trump threatened 200% tariffs on European spirits such as Champagne on March 13, escalating the trade war between the two economies, the S&P 500 plummeted more than 10% from its February high.
Crypto markets also shed over $1 billion, according to CoinGecko.
Bitcoin dropped 4% and has recouped those losses since, but market uncertainty reigns as investors brace for additional tariffs.
The largest cryptocurrency on the market trades at just over $83,000 and is more than 23% off its all-time high set on January 20.
Liam Kelly is a Berlin-based reporter for DL News. Got a tip? Email him at liam@dlnews.com.