Ethereum News Today: Euro's Digital Future at a Crossroads: Chain vs. Control

The European Union is reevaluating the technological framework for its digital euro, with recent discussions suggesting the possibility of deploying the central bank digital currency (CBDC) on public blockchain networks such as Ethereum and Solana. This development is largely attributed to the influence of the U.S. GENIUS Act, a legislative milestone passed in July 2025 that has established a federal regulatory framework for stablecoins. The act has intensified concerns in Europe about the potential for U.S. dollar-pegged stablecoins to dominate cross-border transactions and erode the euro’s role in the global financial system [1].

European policymakers have historically favored a private, centrally controlled infrastructure for the digital euro, citing privacy and security as primary concerns. However, the Financial Times reported that conversations have shifted toward exploring decentralized, blockchain-based alternatives as a way to enhance the euro's global competitiveness [2]. The report indicates that some officials believe a public blockchain could offer better interoperability with the broader digital infrastructure being developed in the crypto ecosystem [3]. Notably, the European Central Bank (ECB) has not yet finalized the technology stack for the digital euro, maintaining that it is evaluating both centralized and decentralized solutions [2].

The potential shift to public blockchain platforms such as Ethereum or Solana reflects a broader geopolitical and economic recalibration. European officials are particularly wary of the dominance of U.S. dollar-backed stablecoins like Tether’s USDT and Circle’s USDC, which account for 98% of the global stablecoin market. The ECB has expressed concerns that without a strong digital euro, the euro area’s monetary sovereignty and financial stability could be compromised [5]. Additionally, China’s progress on its own digital yuan—though currently deployed on a private infrastructure—has underscored the urgency for the EU to accelerate its digital currency initiatives [2].

From a technical standpoint, there are significant differences in the feasibility of using public blockchains for retail versus wholesale CBDCs. While a public blockchain might be viable for interbank settlements and wholesale transactions—where performance and security requirements differ—retail use cases for a digital euro have not historically considered blockchain as a foundational layer [1]. Instead, the ECB has focused on evaluating the performance of existing systems and exploring innovations with a wide range of partners, including blockchain firms [1]. Nevertheless, some experts suggest that a hybrid model, where digital euros are stored with custodians and linked to blockchain tokens, could be a middle ground that balances performance with decentralization [1].

The decision on whether to proceed with a digital euro is expected to be finalized by the end of 2025 by the ECB Governing Council. If the ECB chooses a public blockchain-based model, it could set a precedent for how central banks globally approach the integration of blockchain in monetary policy. However, the move is not without risks. Critics warn that a public blockchain-based digital euro could introduce greater state influence over blockchain governance and raise concerns about privacy [2]. The ECB has clarified that personal transaction data will not be accessible to the central bank, remaining instead with commercial banks that host the digital euro [5]. This approach aims to address fears of surveillance and the "Big Brother" scenario often associated with CBDCs.

Source:

[1] Unpacking the report that ECB mulls public blockchain for digital euro CBDC (https://www.ledgerinsights.com/unpacking-the-report-that-ecb-mulls-public-blockchain-for-digital-euro-cbdc/)

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

[3] U.S. Stablecoin Law Jolts EU Into Rethinking Digital Euro Strategy: FT (https://www.coindesk.com/policy/2025/08/22/u-s-stablecoin-law-jolts-eu-into-rethinking-digital-euro-strategy-ft)

[4] Congress passes 'Genius Act,' paving way for regulated stablecoins (https://www.nbcmiami.com/news/local/congress-passes-genius-act-paving-way-for-regulated-stablecoins/3681903/)

[5] EU considers blockchains like Ethereum and Solana for digital euro (https://finance.yahoo.com/news/eu-considers-public-blockchains-digital-211540508.html)