Ethereum News Today: EU Considers Public Blockchains to Challenge U.S. Stablecoin Dominance

The European Union is under consideration of adopting public blockchain networks such as Ethereum and Solana for the design and implementation of its digital euro initiative. This potential move, as reported by the Financial Times, reflects a shift in the European Central Bank’s (ECB) strategy to explore broader technological options, including public blockchains, which are open and accessible to everyone, rather than the more restrictive private models [1]. The ECB has not yet confirmed this direction but is actively analyzing the feasibility of such a system.

The decision to explore public blockchains marks a departure from the more centralized, state-controlled models like China’s digital yuan. According to sources familiar with the discussions, EU officials are increasingly viewing a public blockchain-based digital euro as a way to preserve financial sovereignty and reduce dependence on U.S.-dominated stablecoins, which currently hold 98% of the global stablecoin market [1]. The ECB’s executive board member, Piero Cipollone, has previously warned of the risks posed by U.S. dollar-pegged stablecoins, emphasizing the need for a digital euro that aligns with European financial autonomy.

While Ethereum and Solana remain under evaluation, the ECB has not yet finalized its technology framework for the digital euro. Public blockchains offer transparency and decentralization, which are seen as advantages in the context of financial innovation and user trust. The ECB is currently in the preparation phase of the project, having published its third progress report in July, which outlines advancements in the regulatory framework and the involvement of approximately 70 market participants testing use cases [2]. The legal framework for the digital euro will ultimately require approval by the European Parliament and the Council.

The move is also seen as a response to broader geopolitical concerns, particularly around the influence of the U.S. financial system and the growing adoption of China’s private CBDC model. By considering public blockchains, the EU appears to be positioning itself as a regulatory innovator, seeking a digital currency that balances oversight with technological openness. This approach could also provide a framework for future international cooperation, particularly if the digital euro is to serve as a cross-border medium of exchange.

The timeline for the digital euro remains subject to political and legislative processes. The ECB has indicated that the current preparation phase will conclude by the fall, with the groundwork being laid for a potential issuance. However, no official decisions have been made, and the project is still in its exploratory stages. The ECB has not responded to inquiries regarding the potential adoption of Ethereum or Solana, leaving further details uncertain.

Source:

[1] EU exploring Ethereum, Solana for digital euro launch: FT (https://cointelegraph.com/news/europe-mulls-ethereum-solana-digital-euro-launch)

[2] Europe's currency of the future must not become China's e... (https://medium.com/enrique-dans/europes-currency-of-the-future-must-not-become-china-s-e-cny-8c43df1d5595)