European officials are moving quickly on the long-delayed digital euro project after the United States introduced strict stablecoin regulations. The debate has shifted from cautious planning to urgent action, with Europe now considering whether to launch its central bank digital currency (CBDC) on public blockchains such as Ethereum or Solana.

US Law Sparks European Urgency

Momentum for a digital euro accelerated in July, when US President Donald Trump signed the Genius Act into law. The legislation created the first comprehensive framework for the $288 billion stablecoin industry.

Under the new rules, US stablecoin issuers must hold full reserves in highly liquid assets, secure licences, and follow strict reporting standards. By setting clear regulations, the United States has positioned itself as the leader in shaping the global stablecoin market.

European policymakers, by contrast, had been far slower. The European Central Bank (ECB) first began studying a digital euro in October 2021, aiming to complement cash and adapt to the digital economy. Until recently, the plan was to use a private ledger fully controlled by the ECB. But with the US taking the lead, Europe now faces pressure to speed up both its timeline and design decisions.

Public Blockchain or Private Ledger?

The biggest debate in Brussels and Frankfurt today is whether the digital euro should be built on public blockchains like Ethereum or Solana rather than on a closed ECB system.

Supporters of a public blockchain say it would make the euro more competitive and useful globally. A digital euro that runs on open infrastructure could be traded anywhere in the world and integrated easily with decentralised finance applications. They argue this could help the euro gain ground in cross-border payments, where currently non-European firms control between 68% and 72% of eurozone transactions.

Critics, however, warn that public blockchains carry serious risks. Every transaction on Ethereum or Solana is recorded openly, raising questions about privacy and data protection. There are also concerns about how regulators could monitor or control transactions if the system is too open.

The Geopolitical Stakes

The design choice is not just technical, it is geopolitical. A private ledger controlled by the ECB would resemble China’s digital yuan, which is tightly monitored by the state. By contrast, adopting Ethereum or Solana would signal that Europe is embracing a more open, global system.

European officials also worry that if they delay, dollar-backed stablecoins could dominate global payments. ECB executive board member Piero Cipollone has cautioned that the rapid growth of tokens tied to the US dollar might shift euro deposits overseas, weakening Europe’s financial stability.

China is also adjusting its digital currency plans. With over 99% of global stablecoin supply already tied to the dollar, Beijing is reportedly exploring yuan-backed stablecoins to compete more directly in international markets.

What Comes Next for the Digital Euro

The ECB has confirmed it is researching both centralised and decentralised models. However, it has yet to make a final choice on whether the digital euro will run on a private ledger or a public blockchain.

If launched, the digital euro would mark the ECB’s direct entry into digital assets. Unlike private euro stablecoins, it would be a public option fully backed by the central bank, carrying the same guarantee as traditional cash.

For Europe, the decision is about more than technology, it is about the future role of the euro in a world where payments are rapidly digitising. A public blockchain euro could boost innovation and global adoption, while a private system could give regulators stronger control but risk leaving Europe behind in the global race.

The coming months will be decisive. With the United States already shaping the rules of the stablecoin market, Europe has little time left to determine whether its digital euro will compete as an open, borderless currency or remain a tightly controlled project within its own financial system.