Europe’s central bank is considering a major shift for its upcoming digital euro. Officials are now eyeing public blockchain networks like Ethereum and Solana, a notable change from earlier ideas about a private, closed system. This move reflects a strategic play to strengthen the region’s financial independence.
This strategic pivot is all about gaining an edge against the growing power of dollar-pegged stablecoins. New US rules have recently boosted these digital currencies. The European Central Bank (ECB) needs to ensure Europe controls its own financial future.
A New Path for the Digital Euro
The ECB has not yet picked the exact tech for its central bank digital currency (CBDC). However, reports from the Financial Times (FT), citing sources close to the project, suggest the digital euro could run on a public blockchain. This is a big deal. Private blockchains limit who can see data, but public ones like Ethereum and Solana are open and transparent. This openness could help the digital euro work better with other digital platforms. The ECB is still in its preparation phase, with a final decision expected by October 2025.
Standing Up to Stablecoin Influence
This shift to public networks is partly a response to new US stablecoin laws, known as the “Genius Act.” This act is the first set of rules for a stablecoin market worth over $280 billion. US dollar-backed tokens make up more than 98% of this market.
Some ECB members believe a European CBDC can push back against this dollar stablecoin dominance. They want to protect the financial sovereignty of the euro area. Philip Lane, an ECB economist, stated in March that a digital euro would “limit the chance of foreign currency stablecoins taking hold as a way to pay in the euro area.” He added that it’s about “ensuring Europe controls its monetary and financial destiny.” This is especially true “in a world of growing geopolitical fragmentation.”
An FT source pointed out a key difference. A private blockchain digital euro would look more like China’s digital currency. A public network version would be closer to solutions from US private companies, such as Circle’s USDC. The difference is that Europe’s version would be a government-backed project.
Benefits and Roadblocks of a Public CBDC
Using a public blockchain could help the digital euro connect more easily with the global blockchain network. Juan Ignacio Ibañez, chief of staff at the DLT Science Foundation, told Cointelegraph this would be a big plus.
Yet, this path also has its challenges. Public networks mean more government interest in how they are run. This could cause issues around privacy and control. The transparent nature of public networks makes privacy a central point of discussion for the digital euro’s future. The ECB hasn’t officially confirmed its specific interest in Ethereum or Solana. A spokesperson referred Cointelegraph to the bank’s FAQ page. It noted that the digital euro’s technology model is still under review.
Awaiting the Digital Euro’s Future
The EU has pushed harder to develop the digital euro. This comes after new US laws strengthened the stablecoin market under the Donald Trump administration, as noted by the Financial Times. This urgency shows a growing worry about relying on payment systems from outside the region.
The ECB continues its preparation, testing technology with companies across Europe. It aims to make a final decision on issuing the digital euro by the end of 2025. Even the European Parliament is split on the issue. Some lawmakers favor a public solution, while others prefer a private one, El País reported in May.
If Europe chooses Ethereum or Solana, it would be a huge vote of confidence for those projects. It could also make the digital euro a strong and modern competitor among global digital currencies. Its success will depend on balancing new technology with the needs for privacy and financial independence. Notably, the European Investment Bank (EIB), the EU’s investment arm, has already used Ethereum to issue bonds worth millions of euros.
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