Key Takeaways
- The digital euro project has taken on new urgency post-GENIUS Act.
- The U.S. stablecoin legislation has prompted alarm among EU officials.
- One proposal being floated that could accelerate the digital euro timeline is the prospect of issuing the CBDC on a public blockchain.
The European Central Bank (ECB) is reportedly “rethinking plans for the digital euro” in light of the U.S. GENIUS Act, a person involved in the discussion said.
With Washington’s stablecoin legislation already giving a boost to dollar-pegged stablecoins, the EU’s central bank digital currency project has taken on new urgency.
ECB ‘Rattled’ by GENIUS Act
According to one stakeholder cited by the Financial Times, the quick passage of the GENIUS Act “rattled a lot of people.”
“They’re saying, ‘Let’s speed up, let’s push, ’” they added.
With the GENIUS Act creating legislative support for the U.S. stablecoin sector, EU officials are worried about the growing influence of dollar-pegged coins.
Piero Cipollone, a member of the ECB’s executive board, said in April that the U.S. government’s promotion of dollar-backed stablecoins “raise[s] concerns for Europe’s financial stability and strategic autonomy.”
Washington’s measures to promote stablecoins “raise concerns for Europe’s financial stability and strategic autonomy,” ECB executive member Piero Cipollone warned in April.
He said the adoption of dollar stablecoins could lead to “the loss of fees and data” and drive euro deposits to the U.S.
Meanwhile, the rise of dollar stablecoins as a retail payment channel in the EU “could have far-reaching implications for monetary sovereignty.”
Cipollone’s warning reflects a position that is growing in prominence worldwide. For example, South Korean lawmakers are also pushing to advance KRW-based digital currencies in light of the GENIUS Act.
“When the tsunami of dollar stablecoins arrives, the Korean won may barely be used at all,” National Assembly member Min Byung-deok said recently.
Digital Euro Could Use Public Blockchain
One proposal being floated that could accelerate the digital euro timeline is the prospect of issuing the CBDC on a public blockchain.
Until now, the ECB had indicated its preference for a private ledger. However, the idea of using a public blockchain is “definitely something” EU officials are taking “more seriously now,” one EU official told the Financial Times.
A website outlining the digital euro project states that, “the Eurosystem is experimenting with different technologies — both centralized and decentralized — in the development of the digital euro, including distributed ledger technologies.”
“However, a decision has not yet been taken,” it adds. The ECB is expected to issue its final report on the digital euro project’s “preparation phase” in October.
After that, the ball will be in the EU legislature’s court. Cipollone has expressed hope that a political deal will be in place by early 2026.
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
