The European Central Bank (ECB) has expressed concerns about the potential risks posed by the United States’ strong backing of the cryptocurrency industry. The ECB has warned that a surge in dollar-backed stablecoins could have negative effects on Europe’s financial stability. A recent policy paper revealed that the ECB is calling for a review of the Markets in Crypto-Assets Regulation (MiCA) framework to address these concerns. The main issue at hand is the fear that US policies, supported by President Donald Trump, could flood European markets with stablecoins denominated in dollars. This could lead to a shift of European capital into US assets, potentially undermining EU financial sovereignty and exposing banks to liquidity risks. The ECB’s push for tighter controls has clashed with the European Commission’s stance, which believes the existing MiCA framework can manage stablecoin risks effectively. Despite upcoming US regulations like the STABLE and GENIUS Acts aimed at expanding America’s crypto presence, the Commission remains confident in the MiCA rules. The stablecoin sector has grown to a valuation of $234.151 billion, with the ECB warning that European issuers may face redemption pressures without stricter limits, risking a financial “run.” Tether, the issuer of the largest stablecoin USDT, has criticized the MiCA regulation for its stringent requirements, leading to delistings from major European exchanges. The clash between the ECB and the European Commission highlights the ongoing debate over regulating stablecoins in the cryptocurrency market.