Italy Warns of Crypto Risks Amid Trump’s Support Surge

• Trump’s crypto support contrasts with Italy’s cautious stance. 
• Digital assets’ ties with finance threaten global stability. 
• Stablecoins’ reliance on U.S. bonds raises systemic concerns.

The Bank of Italy is worried about the growing importance of the cryptocurrencies as they consider the digital currencies a threat to financial stability.The advisory emerges amidst a growing divergence in global financial perspectives, meanwhile There is a growing trend of President Donald Trump of the United States aligning himself with the bitcoin industry.

The first Financial Stability Report of the year was published by the Bank of Italy on April 28, 2025. In it, the risks that are related to digital assets were described. The report dubs the inherent volatility of cryptocurrencies and how they are emerging as a large part of conventional finances, particularly in the US.

Bank of Italy Flags Crypto Volatility Concerns

The Bank of Italy’s report points to the rapid rise of Bitcoin and other digital assets as a source of instability. In the case of these assets, high price fluctuations are very risky for the investors, and for the financial system in general, it says.

Furthermore, the report presents how crypto is increasingly becoming linked with the real economy, and with established financial institutions. The growing integration of this exposure, especially as it spreads from nonfinancial companies and exchange traded funds (ETFs) to pure play crypto firms, may make systemic risk greater.

The report also looked at stablecoins, which make use of the U.S. dollar very frequently as the peg. However, if these assets are to become systemic, their reliance on U.S. government bonds as backing could in fact introduce wider financial vulnerabilities.

Furthermore, the Italian central bank too expressed its governance concerns regarding the crypto sector. The study identified other risk factors such as the concentration of power among a small number of U.S. based crypto firms and potential conflicts of interest.

However, the response from Italy’s banking system is not entirely positive. Intesa Sanpaolo, the country’s largest commercial bank, is apparently also working on its own cryptocurrency project, in a different way to the rest of the country’s financial sector.

The World Debate Fires up Over Trump’s Crypto Push

Trump’s administration has been notably more antagonistic on the other side of the Atlantic. The former U.S. president has been very vocal in his support of cryptocurrencies as part of a bigger push to introduce them into the U.S. financial system.

Bitcoin has seen a growing line of American corporations take it up as a result of Trump’s influence and now start buying Bitcoin for their treasuries to pump share prices. However, such actions have set off alarm bells among officials in Italy where the central bank fears that the trend could create additional systemic risks.

The Bank of Italy report addresses specifically the implications for his case of U.S. policy shifts under Trump. The statement that if the U.S. retains the systemic importance of cryptocurrencies, then the global financial markets will become more unstable.