EU Considers Accelerating Digital Euro Development Amid U.S. Stablecoin Law
European Union policymakers are accelerating discussions on the digital euro in response to the U.S. GENIUS Act, which regulates the $288 billion stablecoin sector. Key points include:
- The legislation has heightened concerns that dollar-pegged tokens like USDT and USDC could dominate cross-border payments.
- Officials are considering launching a central bank digital currency (CBDC) on public blockchains such as Ethereum or Solana, moving away from a previously preferred private infrastructure.
- The European Central Bank (ECB) had initially favored a centrally controlled system for privacy and security reasons.
- There are worries that euro deposits may shift to dollar-denominated assets due to increasing U.S. momentum.
- China is advancing its digital yuan, while the U.K. is exploring a digital pound, adding pressure on Europe.
- Several euro-backed stablecoins exist, but a central bank-issued token would hold greater significance.
- The ECB is still evaluating both centralized and decentralized technologies for the digital euro.
This development aims to maintain the euro's relevance in an evolving digital economy.