European officials are moving faster on plans for a digital euro after Washington passed a sweeping stablecoin law that many in Brussels see as a threat to the competitiveness of the EU’s single currency.
According to the Financial Times, people close to the talks said the shift began after the US approved the Guiding and Establishing National Innovation for US Stablecoins Act, known as the Genius Act.
Since then, officials have been rethinking how the European project should be structured.
Swift US Action On Crypto Regulation Pressures EU To Accelerate Plans
Signed into law by President Donald Trump in July, the Genius Act sets out the first comprehensive rules for the $288 billion stablecoin market.
Under the legislation, issuers of dollar-pegged tokens must hold full reserves in liquid assets, meet licensing obligations and comply with strict reporting standards. Supporters argue the framework strengthens consumer protection while still leaving room for innovation, a balance regulators had struggled to achieve.
In Europe, the swift move from Washington has unsettled policymakers who had been advancing their own project more cautiously.
Debate Grows Over Public Blockchain Versus Private Ledger For Digital Euro
Officials are now reportedly debating whether a digital euro should run on a public blockchain such as Ethereum or Solana, a departure from earlier plans that leaned toward a private ledger controlled by the European Central Bank.
Supporters say using an open blockchain could allow the euro to circulate more widely, while critics warn that public networks expose transactions to scrutiny and raise privacy concerns.
Supporters Argue Open Blockchain Could Expand Euro’s Reach Beyond Europe
The European Central Bank began studying the idea of a digital euro in Oct. 2021. Since then, the project has been viewed as a central bank digital currency. Its purpose is to complement cash and adapt to a more digital economy. Additionally, it aims to guarantee Europeans continued access to central bank money. Finally, it seeks to reduce dependence on foreign payment providers.
Today, international card networks handle the majority of eurozone payments, with non-European firms dominating between 68% to 72% of transactions.
Officials worry that without swift action, the US regulatory framework could accelerate global demand for dollar-backed tokens. As a result, the euro’s role in cross-border payments may gradually weaken.
The design choice has geopolitical weight. A private, ECB-run system would mirror the Chinese central bank’s approach to its digital yuan, which is tightly controlled. A public blockchain-based euro, by contrast, would move closer to the model promoted by private firms in the US.
Some policymakers argue that a digital euro on an open blockchain could strengthen the currency’s reach beyond the bloc.
Others fear it would open the door to risks that Europe has long tried to contain. For now, both options remain on the table, but the debate has gained urgency in the wake of Washington’s move.
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