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Amundi Warns U.S. Stablecoin Policy Risks Destabilizing Global Payment Systems

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Europe’s largest asset manager, Amundi, has expressed concerns over the potential destabilizing effects of the U.S. GENIUS Act, which aims to establish a regulatory framework for U.S. dollar-backed stablecoins. The policy could accelerate the adoption of dollar-pegged cryptocurrencies worldwide, triggering significant shifts in money flows and potentially undermining the global payment system.

The GENIUS Act, passed by the U.S. Senate and expected to be approved soon by the House and President Donald Trump, mandates stablecoins be pegged to the U.S. dollar. JPMorgan estimates that stablecoins in circulation could double to $500 billion in the coming years, with some forecasts reaching $2 trillion. The increase in stablecoin use would drive demand for U.S. Treasury bonds, providing fiscal benefits for the U.S. but raising concerns about weakening the dollar’s international position.

Vincent Mortier, Amundi’s Chief Investment Officer, highlighted that stablecoins might send a message that the dollar is losing strength, especially as over 80% of stablecoin transactions occur outside the U.S. This raises fears about “dollarization,” where foreign economies increasingly depend on the dollar without direct banking ties to the U.S., which could threaten their monetary sovereignty.

European officials have also voiced alarm. Italy’s Finance Minister Giancarlo Giorgetti labeled U.S. stablecoin policies as a greater threat to Europe’s financial stability than trade tensions. Similarly, the Bank for International Settlements warned about stablecoins’ risks to monetary sovereignty, transparency, and the potential for capital flight from emerging markets.

Mortier noted that stablecoins could act like “quasi-banks” as users treat them like deposits redeemable on demand. Their growing use as direct payment methods could further disrupt traditional banking and payment infrastructures, increasing risks to global financial stability.

Though Amundi currently holds no crypto assets, Mortier remains cautious about stablecoins, emphasizing their possible negative consequences on the global payment ecosystem.

ECB Eyes Trump’s Crypto Plan to Accelerate Digital Euro Development

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The European Central Bank (ECB) hopes that U.S. President Donald Trump’s support for cryptocurrencies pegged to the U.S. dollar will speed up legislative progress for the digital euro, according to ECB board member Piero Cipollone. The ECB sees its digital euro as an alternative electronic payment method that could lessen Europe’s dependence on U.S. companies like Visa and PayPal.

Cipollone noted that Trump’s backing of globally available stablecoins tied to the U.S. dollar would further expand U.S.-dominated payment systems, adding urgency to the digital euro initiative. The European Commission proposed digital euro legislation in June 2023, but progress has been slow amid skepticism from some lawmakers and financial institutions.

“The political world is becoming more alert to this,” Cipollone said in a recent interview. “And it’s possible that we will see an acceleration in the process.” He expressed hope that the European Parliament and Council would finalize their work on the legislation by summer, allowing for negotiations with the Commission. If all goes as planned, the rules could be finalized by November, when the ECB is set to decide whether to launch the digital euro.

EU lawmaker Markus Ferber mentioned that the Parliament might only have a report ready by summer, signaling slower progress than expected.

Cipollone raised concerns about the growing use of U.S. stablecoins, as they could encourage Europeans to transfer their deposits to the U.S. in favor of using dollar-backed stablecoins for payments. This shift, he argued, would further strain European banks as they lose deposits to U.S. platforms.

Bankers are also wary of the digital euro, fearing that it could lead customers to move their funds into ECB-backed digital wallets. To alleviate such concerns, the ECB has proposed capping the holdings in digital euro wallets at a few thousand euros and not offering interest on these deposits.

Globally, other countries, including Nigeria, Jamaica, and the Bahamas, have already launched central bank digital currencies (CBDCs), with 44 other nations, including Russia, China, and Brazil, running pilots. In contrast, Trump has prohibited the U.S. Federal Reserve from issuing its own CBDC.

 

Apple’s Holiday Quarter Sales Affected by AI Delays and Chinese Competition

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Apple is expected to report modest revenue growth for its holiday quarter, with challenges stemming from delayed AI features and heightened competition from Chinese smartphone makers. Analysts predict a slow quarter for the tech giant as its iPhone 16 series, which launched in September, lacked AI features that its competitors, such as Google and Samsung, had already integrated into their devices. While Apple is planning to roll out improved AI capabilities, including updates to Siri, later in the year, these delays have hindered iPhone demand during the crucial holiday-shopping season.

Apple’s struggles with AI were further underscored when the company had to retract a news-summarizing AI tool that was criticized for inaccuracies by media outlets like the BBC. Jane Hepburne Scott, an investment manager at Aegon Asset Management, emphasized that Apple’s slower adoption of AI has contributed to a decline in its competitive standing and loss of market share.

Adding to Apple’s woes is fierce competition from Chinese smartphone manufacturers, particularly Huawei. The company’s global smartphone market share dropped to 23% in the last quarter of 2024, down from nearly 25% the previous year, with an even sharper decline in China, where its share fell by 10 percentage points to 17%. While the Chinese government has been subsidizing domestic smartphone purchases, these incentives primarily target budget-friendly phones, not high-end models like the iPhone.

Despite these challenges, Apple’s services division, which has been growing steadily, is expected to post a 12.9% increase in sales. However, the overall forecast for the quarter remains underwhelming, with analysts expecting just a 3.8% revenue growth for the period, significantly below the 6.1% growth from the September quarter.

Further complicating matters for Apple is the strengthening of the U.S. dollar, which has risen nearly 8% against major currencies, potentially making it harder for Apple to surpass sales expectations in international markets.