The European Union is considering whether to launch its planned digital euro on public blockchains such as Ethereum or Solana, a move that would be a dramatic departure from earlier plans for a tightly controlled central bank system.
According to people cited by the Financial Times, policymakers in Brussels and Frankfurt are debating whether the risks of using open networks could be outweighed by the benefits of keeping the euro competitive against dollar-backed stablecoins, which are poised for rapid growth after the U.S. passed its first federal stablecoin law this summer.
The GENIUS Act, signed in July, requires stablecoins to be 100% backed by reserves and issued under federal licences. Washington pitched it as the “first-ever federal regulatory system for stablecoins,” effectively giving dollar tokens a legal seal of approval and opening the door to global adoption in cross-border payments.
For Europe, the law raised alarm bells. Officials worry that euro-area transactions could increasingly migrate onto U.S.-regulated stablecoins, supporting the dollar’s dominance and further entrenching Europe’s reliance on foreign providers such as Mastercard and Visa.
“America’s new stablecoin framework has caught many in Europe off guard,” one EU official told the FT. “It makes the digital euro not just a financial project, but a geopolitical necessity.”
Until recently, the European Central Bank (ECB) favoured a closed, centrally managed model for the CBDC, citing security and privacy concerns. ECB executive board members repeatedly stressed that a digital euro must offer “cash-like” privacy features, including offline payments, which are harder to guarantee on a public blockchain.
But the momentum changed as advocates say public chains offer scale, interoperability and access to a large global developer ecosystem — advantages that could help the digital euro compete directly with dollar stablecoins. Critics, however, warn that moving onto public blockchains could expose the ECB to operational and regulatory headaches, from transaction censorship to compliance with anti-money-laundering rules.
The European Commission already tabled legislation to provide the legal foundation for a digital euro, but the ECB will not decide on an issuance until after its current preparation phase, which runs through October 2025. Any eventual launch would still require approval by EU lawmakers.
With Washington moving first, it is increasingly seen in Brussels as a test of whether the euro can adapt fast enough to stay relevant in the digital age.
