EU explores Ethereum and Solana blockchains for digital euro launch.
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EU Evaluates Public Blockchains for Digital Euro Initiative
The European Union is reportedly assessing the potential of leveraging major public blockchain networks, such as Ethereum and Solana, as the foundational technology for its forthcoming digital euro. This exploration signifies a potential pivot from private to public blockchain models, aligning with a broader trend towards transparency and decentralization in digital currencies.
According to a report by the Financial Times, the European Central Bank (ECB) is considering utilizing public blockchain infrastructure, which contrasts with more restrictive private blockchain systems. Public blockchains are accessible to all users, providing a level of transparency and decentralization not available with private blockchain networks, which are typically limited to authorized participants.
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Implications of Public Blockchain Adoption
Should the EU proceed with a public blockchain model for the digital euro, it would mark a significant development in the digital currency’s evolution. The ECB has yet to finalize the technological framework for the digital euro, but this consideration of public blockchains is a notable step forward. The choice of Ethereum or Solana could influence the design and functionality of the digital euro, potentially enhancing its interoperability and security.
In contrast, China’s central bank digital currency (CBDC) operates on a private blockchain, which limits access and control to state authorities. The EU’s exploration of public blockchains may offer a more open alternative, potentially setting a new standard for central bank digital currencies globally.
Related: European Central Bank Unveils Report on Digital Euro's Progress
EU’s Strategic Positioning
The EU’s consideration of public blockchains is also seen as a response to the growing influence of US-based stablecoins, which dominate the market. With the dollar-pegged stablecoins accounting for a significant portion of the global stablecoin market, the EU aims to bolster its financial autonomy by developing a robust digital euro.
In a statement earlier this year, ECB board member Piero Cipollone emphasized the need to limit stablecoin usage in Europe, advocating for a digital euro to mitigate the adoption risks associated with US stablecoins. This strategic move is part of a broader effort to safeguard the euro’s position in the global financial landscape.
Related: Will the Digital Euro Offset the Growing Financial Dominance of the US and China in Europe?
As the ECB continues its exploration, the final decision on the digital euro’s technological foundation remains pending. The central bank has not yet confirmed its choice between Ethereum or Solana, and further developments are anticipated as the project progresses.
For more insights on the EU’s digital euro initiative, visit the European Central Bank’s official website and CoinDesk’s coverage.
Michael has been a vital voice in crypto security, focusing on blockchain vulnerabilities and emerging technologies. With a background in cybersecurity and fintech, he ensures our readers stay informed on safeguarding their assets while exploring new opportunities in the crypto space.
