The European Union is accelerating work on launching a digital euro after the US passed a landmark law regulating the stablecoin market worth over $288 billion. The new American rules have raised concerns in Brussels about the competitiveness of the European currency and its role in the global financial system. This is reported by Financial Times, writes UNN.
Details
According to FT sources, EU officials are considering the possibility of placing the digital euro not only on a private but also on a public blockchain platform, such as Ethereum or Solana. Previously, this option was rejected due to privacy risks, but the rapid progress of the US has forced European regulators to "reconsider their approach."
What threatens the dominance of the dollar
The use of dollar stablecoins could push the euro out of international settlements.
There is a risk that European deposits will "flow" to the US. The dollar could further strengthen its position in cross-border payments.
Europe cannot afford excessive dependence on foreign payment solutions
Who is already ahead
China is actively implementing the digital yuan.
The UK is considering a digital pound.
In the US, stablecoins are issued by companies like Circle and Tether, while major banks such as Citi and JPMorgan are preparing to launch their own tokens.
Although euro stablecoins already exist, the largest of which belongs to Circle with a capitalization of $225 million, the creation of a digital euro by the ECB would solidify the region's strategic autonomy and reduce dependence on dollar tokens.
The ECB stated that it is exploring various technologies - both centralized and decentralized, including distributed ledger technologies. The final decision on the architecture of the digital euro has not yet been made.