22nd August 2025 – (Brussels) European Union officials are expediting efforts to launch a digital euro following the recent passage of a landmark U.S. stablecoin law that has heightened concerns about the global competitiveness of a European digital currency, according to individuals involved in the discussions.
Last month, the U.S. Congress approved the Genius Act, a pivotal law regulating the $288 billion stablecoin market, which is predominantly dollar-based. The move, heavily influenced by lobbying from the cryptocurrency industry, has prompted EU policymakers to revisit and intensify their plans for a digital euro.
Stablecoins are digital tokens tied one-to-one to a fiat currency and backed by reserves such as government bonds. Since the Genius Act’s approval, EU officials have been exploring the possibility of running a digital euro on a public blockchain, such as Ethereum or Solana, rather than a private one, to address growing privacy concerns. Initially, a private blockchain was expected to underlie the digital euro.
“The swift passage of the U.S. law rattled a lot of people,” said a source familiar with the discussions. “Now, the sentiment is: ‘Let’s accelerate, let’s push forward.'”
The European Central Bank (ECB) has been working for years on the concept of a digital euro, aiming to provide a central bank-backed payment method as cash usage declines. Proponents argue that a digital euro would increase global euro adoption while safeguarding the currency’s dominance across Europe. However, the Genius Act has intensified fears that dollar-backed stablecoins may further erode the euro’s standing in international markets.
“This legislation is sparking discussions we weren’t having before,” said one insider.
ECB executive board member Piero Cipollone expressed concerns earlier this year, stating that the rise of US dollar-backed stablecoins could threaten Europe’s financial stability and autonomy. Cipollone warned that the trend could lead to euro deposits shifting to the US and further entrench the dollar’s dominance in cross-border payments.
Major crypto companies like Circle and Tether already operate prominent dollar-pegged stablecoins, and US banks, including Citibank and JPMorgan Chase, are reportedly considering their own offerings. While several euro-denominated stablecoins exist, the largest, issued by Circle, has a market capitalisation of $225 million — far below the scale of their U.S. counterparts.
The ECB aims to cement its role in the digital asset space by creating an official digital euro, which could bolster the region’s financial infrastructure and reduce reliance on foreign payment solutions. Cipollone previously emphasised, “Europe cannot afford to rely excessively on foreign payment systems.”
If the digital euro were to operate on a public blockchain, it could circulate more widely and potentially gain broader adoption. However, privacy concerns remain significant as transactions on public blockchains are visible to all. EU officials are now weighing the trade-offs between centralised and decentralised technologies, with no final decision yet reached.
One source noted that the digital euro, if implemented privately, would resemble China’s central bank digital currency model, which is tightly controlled by the People’s Bank of China. Conversely, adopting a public blockchain could align the digital euro more closely with the decentralised systems used by private firms in the U.S.
