Ethereum News Today: Europe Considers Public Chains to Challenge Dollar Dominance in Digital Currency

The European Union is currently evaluating the use of public blockchain networks, including Ethereum and Solana, as foundational infrastructure for the digital euro initiative, according to recent reports. This exploration by the European Central Bank (ECB) marks a notable shift in its approach to digital currency development, which had previously leaned toward private or hybrid blockchain models [1].

The Financial Times reported that EU officials are increasingly considering the potential benefits of public blockchains, where data is accessible to anyone, compared to private blockchains that restrict access to authorized entities. A source involved in the discussions confirmed that the idea of a public blockchain has gained more attention in recent months. This development could set the digital euro apart from China's central bank digital currency (CBDC), which operates on a private model [1].

One of the driving factors behind this shift is the growing concern within Europe regarding the dominance of US dollar-pegged stablecoins, particularly those issued by private companies. The ECB has expressed unease over the implications of relying heavily on US-based stablecoins, which currently account for nearly 98% of the stablecoin market. In April, ECB executive board member Piero Cipollone emphasized the need to reduce Europe's dependence on these stablecoins by promoting the adoption of the digital euro [1].

The proposed use of Ethereum or Solana for the digital euro could represent a significant milestone in the project’s development. These networks offer high throughput and decentralized consensus mechanisms, which align with the ECB’s goals of creating a secure, scalable, and transparent digital currency. However, the ECB has not yet publicly confirmed whether it is pursuing either of the two blockchain options. When contacted, the ECB did not provide a response by the time of publication [1].

Analysts have pointed out that the adoption of a public blockchain could also influence broader policy discussions on financial sovereignty and cross-border payments. Unlike China's CBDC, which operates within a tightly controlled regulatory framework, a public blockchain-based digital euro could facilitate greater transparency and interoperability with global financial systems. This approach aligns with the European Union’s broader goals of maintaining financial autonomy and reducing reliance on foreign financial systems [1].

The digital euro project remains under active development, with key technical and regulatory decisions still pending. While the ECB has not finalized the technology framework, the increasing openness to public blockchain solutions signals a potential shift in the project's trajectory. This could have significant implications for the future of digital currency policy in Europe and beyond [1].

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