EU Explores Ethereum and Solana for Digital Euro Implementation

The European Union is speeding up its digital euro development in response to new US stablecoin regulations that many European officials view as a competitive threat to the euro’s global position. According to recent reports from the Financial Times, EU policymakers are now considering whether to deploy the digital euro on public blockchains such as Ethereum or Solana rather than the private, ECB-controlled ledger that was previously favored.

This shift in approach began after Washington passed the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act) in July 2025. The legislation, signed into law by President Donald Trump, creates comprehensive rules for the $288 billion stablecoin market in the United States.

The US law requires stablecoin issuers to maintain full reserves in liquid assets, obtain proper licensing, and follow strict reporting standards. Many in Brussels view this swift regulatory action as a potential threat that could strengthen the dollar’s dominance in digital payments.

Public vs. Private Blockchain Debate

European officials are now actively debating the merits of using a public blockchain for the digital euro. Until recently, the European Central Bank (ECB) had been expected to develop a private, closed system for its central bank digital currency.

Supporters of the public blockchain approach argue it would allow the euro to circulate more widely beyond Europe’s borders. A digital euro on an open blockchain could be traded anywhere, potentially strengthening the currency’s role in cross-border payments.

Critics warn that public networks like Ethereum and Solana expose transactions to greater scrutiny and raise privacy concerns. This transparency issue remains a major point of caution for European regulators who have traditionally placed high value on financial privacy.

The ECB confirmed it is studying both centralized and decentralized technologies as it moves forward with digital euro plans. However, the bank has not yet made a final decision on the technical design.

Geopolitical Implications

The design choice carries weighty geopolitical implications. A private, ECB-controlled system would more closely resemble China’s approach with its digital yuan, which maintains tight central control. In contrast, a public blockchain-based euro would move closer to the model being promoted by private firms in the United States.

Piero Cipollone, an ECB executive board member, has warned that the growth of dollar-pegged tokens could undermine Europe’s financial stability by shifting euro deposits overseas and further entrenching the dollar in international transactions.

European officials worry that without quick action, the US regulatory framework could accelerate global demand for dollar-backed stablecoins. This could gradually weaken the euro’s role in the digital economy and cross-border payments.

Currently, international card networks handle most eurozone payments, with non-European firms dominating between 68% to 72% of transactions. A digital euro aims to reduce this dependency on foreign payment providers.

The ECB began studying the idea of a digital euro in October 2021. Since then, the project has been viewed as a central bank digital currency that would complement cash and adapt to an increasingly digital economy.

Like the EU, China is also concerned about dollar stablecoin dominance. Beijing is considering approving yuan-backed stablecoins to enhance the international use of its currency and compete with US dollar-powered tokens, which currently account for more than 99% of global stablecoin supply.

The renewed urgency in Europe’s digital currency plans highlights how central banks worldwide are responding to rapid changes in the digital payments landscape. As the ECB weighs its options, the decision between public and private blockchain infrastructure may shape the future of the euro in the global financial system.

For now, both options remain on the table, but the debate has gained new momentum following Washington’s regulatory moves. The final design of the digital euro will likely reflect Europe’s attempt to balance innovation, privacy, and the currency’s international competitiveness.