EU eyes Ethereum or Solana to support digital euro rollout plans

The European Union is now rushing to build a digital euro before U.S. dominance in crypto becomes permanent. This came after U.S. lawmakers passed the GENIUS Act, a sweeping new law that gives full legal clarity to the $288 billion stablecoin market mostly tied to the dollar.

The Financial Times reported that once the bill went through Congress, EU officials began overhauling their digital euro strategy, afraid that the dollar’s grip on the crypto world was about to lock in for good.

Officials inside the European Central Bank have been working on the digital euro for years. But this law from Washington triggered panic. One official said the fast approval of the GENIUS Act “rattled a lot of people,” and that now, everyone is saying: “Let’s speed up, let’s push.”

The euro was already under pressure globally, and this law made it worse.

The plan had been to launch the digital euro on a private, centralized system controlled by the ECB, something like what China is doing with its own central bank coin. That’s no longer the only option being considered.

After the GENIUS Act, people inside the EU started looking at running the euro on a public blockchain instead, with Ethereum and Solana now on the table.

EU considers Ethereum and Solana for digital euro rollout

The public blockchain idea was previously ruled out due to privacy issues. Transactions on Ethereum or Solana are public. Every wallet, every transfer; visible to anyone.

But with the U.S. already regulating stablecoins and big crypto players like Circle and Tether running massive dollar-pegged tokens, the EU is under pressure to go global with its own system. A public blockchain would let the digital euro be used and traded anywhere, not just inside the Eurozone.

One official told the FT that this option is now “definitely something that [EU officials are] taking more seriously.” If they go private, the euro will look more like China’s token. If they go public, they move closer to what U.S. companies are doing — except with a sovereign European asset.

Piero Cipollone, executive board member at the ECB, warned back in April that the U.S. push for dollar-backed stablecoins could damage the EU’s financial position. He said it could lead to “euro deposits being moved to the United States” and increase the use of the dollar in international payments.

Cipollone said the U.S. is trying to strengthen its role in crypto-based payments and added, “Europe cannot afford to rely excessively on foreign payment solutions.”

EU sees U.S. dominance as threat to euro’s role

Right now, Circle runs the biggest euro-pegged stablecoin with a market cap of $225 million. But that’s nothing compared to the dollar tokens. The ECB knows it has to act or risk falling behind.

The new American law is expected to boost the usage of these dollar-denominated stablecoins even further, something that European officials want to stop before it spreads deeper into their own financial system.

Banks in the U.S. like JPMorgan and Citi are also preparing to launch their own tokens. That means even more dollar-backed products entering global markets. And that’s exactly what the EU is trying to avoid.

The ECB told the FT that it is still reviewing “different technologies, both centralized and decentralized, in the development of the digital euro, including distributed ledger technologies.”

A final decision has not yet been made, but it’s now clear that public systems like Ethereum and Solana are being taken seriously.

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