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– A senior European banker on Tuesday suggested that Washington’s recent actions on the Federal Reserve threaten the global dominance of the U.S. dollar.

The head of the European Central Bank’s Governing Council, Francois Villeroy de Gallo, shared his concerns during a speech in Paris on Jan. 6. He highlighted three aspects where the U.S. policy creates problems for the U.S. currency, which has long been the world’s main reserve unit.

According to the French financier, the White House administration’s attacks on the Fed’s independence, questions about how the U.S. budget is managed, as well as new trade barriers separating the country from global markets, are weakening the foundation that gave the dollar its leading position.

The recent U.S. course has weakened some of the pillars of the dollar’s dominance: the attack on the Fed’s independence, doubts about U.S. fiscal discipline and the imposition of duties that reduce U.S. involvement in the global economy, Villeroy told the audience at an event marking France’s G7 presidency.

He added that concerns about Washington’s potential use of dollar settlement systems as a political weapon are pushing other powers to develop their own alternatives. These trends are reducing depositors’ confidence in dollar-denominated instruments and are likely to accelerate the slow but sure shift to a multi-currency system in international trade, he said.

ECB officials have noted for some time that the instability around the dollar – largely due to Fed Chairman Jerome Powell’s public criticism of President Donald Trump – is paving the way for the euro to play a more prominent role in the global financial system. Still, Villeroy tends to believe that a world with several leading currencies sharing power could prove more stable than the current paradigm.

In his speech, he touched upon the creation of a secure euro investment product, emphasizing that “the development of a secure euro asset deserves our close attention”. As examples, he cited the possibility of converting part of national government debt into European debt and consolidating existing co-borrowing facilities.

criticism of Villeroy sounded against the background of favorable for his theses of economic data in France. According to the latest reports, France’s annual inflation rate fell to 0.

8% in December 2025, the lowest in seven months. This is below the 0.9% recorded in October and November and below analysts’ expectations. The decline was largely due to a steeper fall in energy costs, down 6.8% from 4.6% previously, with cheaper fuel playing a key role.

This puts Villeroy in a winning position to prove his point. While the U.S. government is pressuring the Fed to lower rates to support a slowing economy, Villeroy can point to the fact that the ECB’s independent, evidence-based strategy has already brought inflation to the 2% target without any political interference.

Meanwhile, the debate over the Fed’s independence is moving from theory to practice as Trump seeks a replacement for Powell. Fed Chairman Stephen Miran said Tuesday morning on Fox Business that he has not discussed the possibility of taking over as the next Fed chairman with Trump and is not seeking the position. He said he is not on the list of candidates, characterizing the actual contenders as “extremely credible” individuals.