ECB Warns US Policies Undermine Dollar Confidence Amid Global Stability Concerns
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
Source: Coinmarketcap
Updated: Jan 06 2026- Dollar Confidence Crisis: ECB Governing Council member François Villeroy warns that U.S. fiscal and monetary policies are eroding international confidence in the dollar, with projected budget deficits averaging 6.1% of GDP over the next decade, exacerbating global financial instability.
- Impact of Fiscal Deficits: Villeroy highlights that persistent high budget deficits force heavy Treasury issuance, which may weaken foreign creditor appetite for U.S. bonds, leading to increased borrowing costs and market volatility.
- Trend of Currency Diversification: IMF data shows the dollar's share of global foreign exchange reserves has declined from 71% in 2001 to 58% in 2024, indicating central banks are diversifying reserves into euros and gold to mitigate perceived risks.
- Geopolitical Implications: Villeroy's warning carries significant geopolitical weight, suggesting that the U.S. must restore fiscal discipline to maintain the dollar's global dominance and avoid diminishing its strategic influence.
About the author
Ohris M. Greyoon
Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.
