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- The idea of a digital euro came from the European Central Bank in 2020, as stablecoins like USDT and USDC started dominating.
- The ECB is reportedly revisiting its roadmap for the digital euro, considering Ethereum or Solana as potential infrastructures.
EU officials are accelerating their rollout of a digital euro to protect financial stability and sovereignty. According to a recent Financial Times report, the digital euro is likely to be launched on a public blockchain such as Ethereum (ETH) or Solana (SOL).
The European Central Bank (ECB) has been working on this project for several years, driven by concerns about the growing influence of U.S. dollar-pegged stablecoins.
These coins are expected to drive even more demand for the dollar, and EU officials fear that if dollar-backed assets dominate across Europe, it could undermine the position of the euro within its own region.
To prevent that, they see the digital euro as a way to protect the single currency’s role and ensure it remains central to Europe’s financial system.
On its official website, the ECB explains that the Eurosystem is experimenting with multiple technologies in the development of the digital euro, including both centralized systems and decentralized options such as distributed ledger technology.
The goal is to offer European consumers a simple, secure, and private digital payment option that can be used across the eurozone. Basic payments would be free, and the system would be designed to cover all types of transactions while protecting user privacy.
In addition, technical work on privacy, offline functionality, and operational resilience is progressing well. We are also in the middle of the procurement process to establish framework agreements with possible future providers of digital euro services,
Having a legal framework is a cornerstone of the digital currency race. In 2023, the EU introduced a set of crypto rules under Markets in Crypto-Assets (MiCA). Under this, any issuer of a stablecoin in the EU, formally referred to as e-money tokens (EMTs), must first receive supervisory approval before launching.
On top of that, EMT issuers are required to keep most of their reserves in an EU-based bank. This is meant to guarantee that, if customers want to redeem their tokens back into traditional euros, those issuers actually have the reserves to honor those requests.
The U.S. Regulatory Push
Across the Atlantic, the U.S. has also been tightening its grip on stablecoin regulation. As Crypto News Flash explained, the GENIUS Act laid down the first comprehensive set of rules for the $288 billion stablecoin market, providing clear oversight and legislative support for the sector.
To make things even more interesting, Wyoming made history by launching FRNT, the very first U.S. state-issued stablecoin, fully backed by dollars and U.S. Treasuries. Unlike most government initiatives that tend to move slowly, FRNT came out multi-chain right from the start, available on seven different networks, including Ethereum, Solana, and Avalanche (AVAX).
Right now, both Ethereum and Solana are in the red. ETH has slipped about 9% over the past week and another 1% in the last 24 hours, bringing it down to around $4,200.
Solana’s had an even sharper dip, losing 3% in a single day to trade near $177. But it’s not all bearish talk, crypto analyst Ali Martinez points out that Solana’s chart is showing signs of a triangle breakout to $360.
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