EU Reports Plans for Digital Euro on Public Blockchains

The European Union is actively advancing the development of a digital euro, a central bank digital currency aimed at preserving monetary sovereignty and competing with U.S.-backed stablecoins in an increasingly digital economy. Recent discussions have shifted towards deploying the digital euro on public blockchains like Ethereum and Solana, marking a significant departure from earlier plans for a fully centralized system, as these platforms offer scalability, interoperability, and efficiency advantages. This move is largely driven by concerns following the U.S. GENIUS Act, which has legitimized dollar-pegged stablecoins, potentially threatening the euro's dominance in global transactions and prompting the EU to accelerate its digital currency strategy. The European Central Bank is exploring a hybrid approach that combines the security and privacy features of a centrally controlled currency with the benefits of decentralized blockchain technology, aiming to balance regulatory oversight with technological innovation. The digital euro is also intended to replicate the privacy, accessibility, and universality of cash while providing a public alternative to private digital payment systems, thereby safeguarding consumer choice and financial stability amid the decline of cash usage. Overall, this initiative underscores a broader geopolitical and economic effort by Europe to maintain control over its monetary infrastructure and foster a competitive digital financial ecosystem.