The Italy warns crypto risks headline gained traction after the Bank of Italy released a stark report criticizing the United States’ growing support for cryptocurrencies under President Donald Trump. The Italian central bank labeled this policy as aggressive and warned it could undermine the global financial system.
Bank of Italy: U.S. Crypto Policies Are a Global Threat
According to the financial stability report, the Bank of Italy noted a significant surge in digital asset markets following Trump’s inauguration and his administration’s endorsement of crypto innovation. Most of the capital flowed into speculative assets like Bitcoin, whose extreme volatility poses systemic risks if closely linked to traditional finance.
Bitcoin Dominance Raises Systemic Red Flags
By late March, the global crypto market capitalization reached $2.75 trillion, with Bitcoin accounting for more than 60% of that value. Institutional investors — including ETF issuers, trading platforms, and even non-financial corporations — are now holding large amounts of BTC. This growing entanglement, the Bank warns, could allow companies to manipulate stock prices or shift business strategies, destabilizing markets.
Stablecoins Like USDT and USDC Add More Risk
The report also addressed dollar-backed stablecoins such as Tether (USDT) and USD Coin (USDC), which rely heavily on U.S. Treasury reserves. Their widespread adoption could trigger market instability during redemption waves. The collapse of any major stablecoin could ripple through global bond markets and impact the broader financial system, the Bank of Italy warned.
European Authorities Echo Concerns
Natasha Cazenave, Executive Director of the European Securities and Markets Authority (ESMA), also voiced concern about cryptocurrencies’ increasing connection to real-world economies. Although digital assets currently occupy a small portion of global finance, their influence is growing, prompting stronger regulatory attention.
