Published by Global Banking & Finance Review®
Posted on October 14, 2025
2 min readLast updated: January 21, 2026
Add as preferred source on GoogleECB's Villeroy stresses U.S. global engagement for financial stability, highlighting tariff impacts and challenges from private stablecoins.
NEW YORK (Reuters) -Protectionism is already proving costly for the U.S. consumer and Washington should instead engage with its allies to tackle global issues that threaten financial stability, French central bank governor Francois Villeroy de Galhau said on Tuesday.
The Trump administration has withdrawn from a host of international programmes and agreements on top of imposing tariffs including on key partners, reducing the global footprint of the U.S.
"The tariff burden is already primarily borne by U.S. importing firms and to a lesser extent U.S. consumers, and this will eventually weaken economic activity," Villeroy told the Bloomberg Global Regulatory Forum in New York.
Europe will not suffer inflationary pressures from this protectionism but will pay the economic cost of tariffs and America’s reduced global role.
Instead of withdrawing, the U.S. should expand its global cooperation on issues like monitoring leveraged hedge funds, the rapid growth of private credit, the tokenisation of financial assets or private stablecoins, Villeroy argued.
"The rise of private stablecoins, which could reach a market capitalisation of between $500 billion and $2 trillion by 2028, presents two significant challenges: traditional financial actors could be displaced by new technology players ... and it could undermine the current balance between central bank money and commercial bank money," Villeroy said.
(Reporting by Balazs Koranyi; Editing by Hugh Lawson)
Financial stability refers to a condition where the financial system operates effectively, allowing institutions to manage risks and absorb shocks, ensuring the economy functions smoothly without major disruptions.
Protectionism is an economic policy aimed at restricting imports from other countries through tariffs, quotas, and other regulations to protect domestic industries from foreign competition.
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