Ethereum News Today: Blockchain Battle: EU Challenges Dollar's Digital Dominion

European Union officials are accelerating efforts to launch a digital euro, driven by concerns over the increasing dominance of U.S. dollar-backed stablecoins and the potential erosion of eurozone monetary sovereignty. The U.S. passage of the GENIUS Act in July 2025 has intensified pressure on the EU to respond, as policymakers now consider the use of public blockchain networks like Ethereum and Solana for the digital euro’s infrastructure [1]. This marks a notable departure from earlier plans, which favored a private, centrally controlled system for security and privacy reasons [2].

The European Central Bank (ECB), which has been studying a digital euro for years, is now evaluating both centralized and decentralized technologies, according to statements provided to the Financial Times. The shift reflects a broader recognition that a public blockchain-based model could enhance interoperability with global digital payment systems and improve the euro’s competitiveness against U.S. stablecoins [1]. This approach also aligns with broader strategic goals to preserve the euro’s relevance in an increasingly digitized financial landscape [3].

The urgency for the EU to act stems from the rapid evolution of the stablecoin market, where U.S.-based tokens such as Tether’s USDT and Circle’s USDC dominate 98% of the sector. ECB Executive Board member Piero Cipollone has emphasized the need for a digital euro to counterbalance this influence and prevent further dependence on non-European payment systems. The digital euro, if implemented, would provide a secure, free, and universally accessible alternative to private payment platforms, ensuring that central bank-issued money remains a core component of daily transactions [2].

While the ECB is considering a blockchain-based approach, concerns remain about privacy and governance. A public blockchain model could expose transaction data to broader scrutiny, raising fears of surveillance and government influence over the network. However, ECB officials have stressed that personal data would not be accessible to the central bank, with commercial banks retaining user information. This safeguard aims to address consumer concerns about a “Big Brother” scenario, in which digital currencies could be used for mass surveillance [3].

The ECB is still in the early stages of its decision-making process. Officials expect the Governing Council to make a final determination on whether to proceed with the digital euro by the end of 2025 [2]. If approved, the development phase could take two to three years, with a potential launch window estimated between 2027 and 2029 [4]. Meanwhile, the digital euro is not intended to compete with the U.S. dollar on a global scale. ECB representatives have clarified that its primary goal is to preserve the euro’s role within Europe and ensure the availability of a public digital payment option in an era dominated by private systems [4].

Source: [1] U.S. Stablecoin Law Jolts EU Into Rethinking Digital Euro Strategy (https://www.coindesk.com/policy/2025/08/22/u-s-stablecoin-law-jolts-eu-into-rethinking-digital-euro-strategy-ft) [2] EU exploring Ethereum, Solana for digital euro launch (https://cointelegraph.com/news/europe-mulls-ethereum-solana-digital-euro-launch) [3] EU considers public blockchains for digital euro (https://finance.yahoo.com/news/eu-considers-public-blockchains-digital-211540508.html) [4] Cash is king: Why does the eurozone need a digital euro? (https://www.euronews.com/business/2025/08/20/cash-is-king-why-does-the-eurozone-need-a-digital-euro)