Ethereum News Today: EU Considers Ethereum and Solana for Digital Euro to Counter Dollar-Dominated Stablecoins

The European Union is accelerating development of a digital euro and considering the use of public blockchains such as Ethereum and Solana for issuance and settlement, according to recent reports. This strategic move reflects growing concerns within European institutions about the euro's role in the global digital payment landscape, particularly as U.S.-dollar stablecoins dominate the market following the passage of new U.S. stablecoin legislation. The European Central Bank (ECB) has highlighted steady progress in its digital euro project, including drafting rulebooks, conducting user research, and engaging approximately 70 market participants through its innovation platform. A public preparation phase is scheduled to last until October 2025, after which the ECB Governing Council will determine the next steps. However, issuance of the digital euro will still depend on EU legislative approval [1].

A key policy driver behind the initiative is the pursuit of strategic autonomy. ECB Executive Board member Piero Cipollone emphasized the importance of reducing structural dependence on non-EU payment systems and ensuring a resilient retail payments infrastructure for the bloc. These comments underscore the urgency of finalizing legislative pathways and anchoring everyday digital transactions in central bank money, both online and offline. The regulatory landscape is already evolving, with the EU’s Markets in Crypto-assets Regulation (MiCA) taking effect in stages from mid-2023 to late 2024, providing a harmonized platform to supervise euro-denominated tokens and service providers [1].

The consideration of public blockchains like Ethereum and Solana suggests a potential distribution model that could integrate with existing digital wallets and tokenized assets while maintaining governance through intermediaries. The ECB has not yet selected a specific architecture and continues to evaluate design constraints, including privacy, holding limits, and offline usability. The Financial Times notes that the exploration of these blockchains reflects a policy opening rather than a finalized decision, consistent with the ECB’s technology-neutral approach [1].

Europe has prior experience with public blockchains in institutional finance. The European Investment Bank issued a €100 million digital bond on Ethereum in 2021, and central banks, including the Banque de France, the Monetary Authority of Singapore, and the Swiss National Bank, have tested public-chain infrastructure for wholesale CBDCs under the BIS-led Project Mariana. These experiments, however, are distinct from the ECB's digital euro initiative and do not directly inform its architecture. They do, however, demonstrate the feasibility of tokenized central bank liabilities on permissionless networks [1].

Current governance and compliance frameworks under MiCA will play a critical role in overseeing stablecoin issuers and service providers while facilitating interoperability with tokenized assets. The ECB has reiterated that the digital euro's issuance remains contingent on EU co-legislators, with political consensus expected no earlier than 2026. The ECB’s July update confirms that the preparation phase remains on track, with ongoing testing involving market participants under its innovation platform framework [1].

As EU supervisors begin enforcing MiCA on stablecoin ecosystems and the ECB refines design parameters for a potential retail CBDC, the assessment of public blockchains is now an active consideration. While no final decision has been reached, the inclusion of Ethereum and Solana signals a significant shift in how the EU envisions its digital monetary sovereignty in the global financial system [1].

Source:

[1] Digital euro may launch on Ethereum or Solana as Brussels scrambles for sovereignty (https://cryptoslate.com/digital-euro-may-launch-on-ethereum-or-solana-as-brussels-scrambles-for-sovereignty/)