The European Central Bank (ECB) is hopeful that the recent support for dollar-pegged cryptocurrencies from U.S. President Donald Trump will speed up the legislative approval process for the digital euro.

What Happened: ECB board member Piero Cipollone conveyed optimism that Trump’s endorsement of globally accessible stablecoins tied to the dollar would spur the digital euro initiative, reported Reuters.

The ECB envisions its digital currency as a central bank-backed online wallet, offering an electronic payment alternative that operates independently of major U.S. providers like Visa Inc. V and PayPal Holdings Inc. PYPL.

Despite the European Commission proposing legislation for the digital euro in June 2023, progress has been sluggish due to skepticism from certain lawmakers and bankers. Cipollone, however, anticipates an acceleration in the process as the political world becomes more aware of the issue.

EU lawmaker Markus Ferber told Reuters that the Parliament could have a report prepared by early summer at the earliest. Meanwhile, Cipollone voiced concerns about the growing use of U.S. stablecoins as a payment method, warning that it might pull deposits away from European banks.

SEE ALSO: Tether Is Bringing USDT To Bitcoin Network, Which Will Allow ‘Millions’ To Send Dollars Globally

Why It Matters: David Sacks, the new AI and crypto czar, is collaborating with lawmakers to make stablecoins a priority. The primary focus would be backing a stablecoin bill introduced by Sen. Bill Hagerty (R-Tenn.), which aims to establish a "clear regulatory framework" for the use of stablecoins through new proposed rules.

Lawmakers are advocating for the issuance of U.S.-based stablecoins to strengthen the dollar's dominance in digital finance. Supporters, including Sacks, argue that this could generate trillions in new demand for the dollar and contribute to lowering long-term interest rates.

A report from CryptoQuant revealed that on 31 Jan. the Stablecoin market capitalization jumped by $37 billion, hitting a record high since Trump's victory in November. The data also revealed that Tether USDT/USD deposited on centralized exchanges has played a key role in driving stablecoin liquidity.

The Trump administration’s recent pro-crypto shift has also paved the way for major banks to enter the digital asset market, potentially revolutionizing traditional finance and accelerating Bitcoin BTC/USD and other crypto’s mainstream adoption.

• READ MORE: Michael Saylor Eyes 45% Volatility Gap Between Bitcoin And Traditional Markets, Reveals New Strategy To Attract ‘Large Pool Of Investors’

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.