France central bank governor says Trump is “sowing the seeds of future upheavals” by supporting crypto
Francois Villeroy de Galhau, the governor of Banque de France and the European Central Bank Governing Council’s member, believes U.S. president Donald Trump is making a huge mistake by supporting cryptocurrencies.
In an interview with French weekly La Tribune Dimanche, Villeroy de Galhau said that the U.S. might be paving the way for the next financial crisis by embracing cryptocurrencies and non-bank finance. He said that, “The United States risks sinning through negligence,” adding that:
“Financial crises often originate in the United States and spread to the rest of the world. By encouraging crypto-assets and non-bank finance, the American administration is sowing the seeds of future upheavals.”
Three of the five biggest financial crises emerged in the U.S. This includes The Great Depression, triggered by the Wall Street crash in 1929, the OPEC Oil Price Shock of 1973, when members of the Organization of the Petroleum Exporting Countries halted oil exports to the U.S., and the Great Recession that was triggered by the collapse of the U.S. housing market bubble.
Villeroy de Galhau has been openly critical of Trump’s policies
Villeroy de Galhau was one of the first economists to voice his concerns about Trump and his policies, even before Trump’s inauguration in January. On Jan. 15, he said:
“I believe that what we sometimes hear in the United States about the lack of regulation of non-banks, the various funds (…) or the lack of regulation of crypto-assets is something that would put financial stability at risk.”
Earlier this week, Villeroy de Galhau said that Trump’s trade wars and economic policy is a “tragedy for the American economy.”
Villeroy de Galhau is not alone in his criticism. German central bank chief Joachim Nagel recently called it “economic policy from a horror show.”
Deregulation in the U.S. is “dangerous”
Since Trump has come into power, there has been a marked shift in how the administration deals with digital assets. For instance, the Securities and Exchange Commission (SEC) has dropped major cases against crypto exchanges, including Coinbase.
Trump has also created a crypto strategic reserve, whereby the U.S. will stockpile tokens like Bitcoin (BTC) and Ethereum (ETH).
Villeroy de Galhau believes that the “current wave of American deregulation is dangerous.”
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