The European Central Bank (ECB) is considering the possibility of launching a digital euro on public blockchains like Ethereum or Solana, which could open new opportunities for the euro’s spread beyond Europe. According to Rama Kumar, a leading employee at OpenLedger, utilizing these technologies will enhance the programmability of the digital currency and ensure integration with the global developer ecosystem.
This is reported by Finway
Advantages of Blockchains and the Impact of Stablecoins
Ethereum is known for its advanced infrastructure for programming smart contracts and a large developer community, while Solana stands out for its low fees and high throughput, making it attractive for mass transactions. Experts believe this will allow the euro to quickly integrate into DeFi, global wallets, and the cross-border payment system without the need to create separate infrastructure.
“If the dollar gains an advantage in digital payments, it risks overshadowing the euro in global finance,” Kumar emphasized.
Discussions about the future of the digital euro have intensified following the signing of the GENIUS Act on stablecoins by U.S. President Donald Trump, which favors dollar-backed tokens in global finance. This move is prompting Europe to accelerate the development of its own central bank digital currency (CBDC).
Challenges and Concerns for Implementing the Digital Euro
Regulators emphasize that the choice of infrastructure for the digital euro must remain technologically neutral. However, the use of public blockchains raises a number of risks—from issues related to personal data protection in accordance with GDPR requirements to scalability problems, network stability, and control over validators.
The ECB also warns that the widespread adoption of the digital euro could lead to a withdrawal of deposits from traditional bank accounts. ECB Executive Board member Piero Cipollone warned back in April that American stablecoins could displace deposits from European banks and strengthen the dollar’s position in the global market.
“The measures taken by the new U.S. administration to promote dollar-backed crypto assets and stablecoins raise concerns about financial stability and Europe’s strategic autonomy,” he wrote.
According to the ECB’s official position, the technical implementation of the digital euro could take between two and a half to three years after the relevant legislation is passed. The European system is experimenting with both centralized solutions and decentralized distributed ledger technologies, but a final decision has yet to be made.
Meanwhile, survey results among 19,000 residents from 11 Eurozone countries indicate a low interest in the digital euro: most Europeans are only partially willing to invest funds in the new digital currency, raising questions about its popularity at the start of implementation.