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The European Union looks like it is going to be pressing on with plans for a digital Euro in response, at least in part, to the United States’ pro-stablecoin GENIUS Act.
European financial chiefs appear to be set to take action owing to concerns that the US Dollar is cornering the $288 million stablecoin market, which is dominated by dollar-pegged cryptocurrencies. While the European Central Bank (ECB) has been working on a digital version of the single European currency for a few years now, this marks a step-up in the plans.
Something notable is that reports suggest the digital Euro, which was initially proposed to operate on a public blockchain due to security concerns, is now being earmarked for a public blockchain, such as Ethereum or Solana. This could, at least in theory, lead to a quicker rollout which could see the digital Euro gain swifter public usage.
Such a move could have a significant impact, not only on the European and world economies, but also on the European crypto industry itself.
With the continent turning into one of the major hubs of crypto development and innovation, featuring both blockchain finance companies and a high take-up of no verification crypto casinos, it will be worth keeping an eye on what the digital Euro could mean for the Web3 and blockchain industries, both in Europe and overseas.
If the currency goes onto Ethereum or Solana, then that could, in turn, lead to it being supported by those blockchains’ devoted followers. On the other hand, it could face pushback from the supporters of the platform’s rivals.
The Financial Times quoted an unnamed ECB source as claiming officials were taking using a public blockchain more seriously than they had been. A public blockchain could give the digital Euro an instant wide availability, but there are still concerns that it would not protect users’ privacy.
Earlier this year, some of Europe’s top bankers expressed their concerns that the GENIUS Act, which sets up a regulatory framework for stablecoins, including rules on who can issue them and how they can be backed. ECB executive board member Piero Cipollone said in April that, with the United States authorities seemingly promoting stablecoins, he had his concerns for the American move’s implications for European financial stability and autonomy.
The former Bank of Italy deputy governor went on to say that the ramifications of the GENIUS Act could end up with former Euro deposits being transferred to the United States, and that this could, potentially, lead to a strengthening of the dollar’s position in cross-border payments and a weakening of the Euro’s usage. He added: “Europe cannot afford to rely excessively on foreign payment solutions.”
Previously, the digital Euro had been pencilled in for a potential October 2025 launch but, if it does come out on a public blockchain, it could arrive sooner.
Europe is not the only jurisdiction to consider using a digital version of its currency. China is already some way on the road to launching a digital Yuan, while the British government is reportedly considering a digital Pound.
