The European Union is considering issuing the digital euro on public blockchains like Ethereum or Solana, marking a significant shift in approach.
Issuing the digital euro on a public blockchain could increase accessibility, facilitate cross-border transactions, but also pose many security and privacy challenges.
MAIN CONTENT
The EU is considering using public blockchain for the issuance of the digital euro, differing from a privacy model.
Stablecoin laws in the United States are prompting Europe to accelerate the issuance of the digital euro.
The goal of the digital euro is to enhance financial independence and support safe, efficient digital payments.
Should the digital euro operate on a public blockchain?
The choice of a blockchain platform for the digital euro is a key issue, directly affecting its usability and financial control.
If the digital euro runs on Ethereum or Solana, it will be able to circulate widely in global cryptocurrency markets, boosting cross-border payments and increasing applicability in e-wallets, exchanges, and decentralized applications.
However, this model means that transactions will be very transparent, raising security and privacy risks for users, causing concern among many experts.
How are regulations in the United States accelerating Europe's development of the digital euro?
The U.S. GENIUS Act, recently enacted, establishes a strict framework for stablecoins, requiring full reserves, licensing, and transparent reporting.
This rapid regulation has reinforced the position of USD-backed cryptocurrencies, leading European officials to realize the risk of falling behind in the global digital financial race if the digital euro's issuance is delayed.
The event of the U.S. passing the GENIUS Act places strong pressure on Europe to speed up the digitization of the euro to avoid losing its role in the digital economy.
Insights from a European financial expert, 2024
What is the digital euro designed for?
The European Central Bank began researching the digital euro in October 2021 to ensure that citizens still have access to central money in an increasingly digital economy.
The digital euro is designed to supplement cash rather than completely replace it, while reducing reliance on non-European payment service providers like Visa and Mastercard, which currently account for about 70% of transactions in the eurozone.
This contributes to enhancing financial independence and digital sovereignty for Europe in an increasingly competitive global context.
How are Europeans weighing between public blockchain and private control systems?
The choice between a public network or private control is the central discussion. A public blockchain expands global accessibility but poses financial security risks.
Conversely, a private control system managed by the ECB would allow for tight supervision, similar to China's strategy with the digital yuan, ensuring safety but limiting scalability.
Responsible control and transparency are key to protecting citizens and maintaining the credibility of the digital euro.
Statement from the European Central Bank representative, 2024
How is the global race for cryptocurrency unfolding?
Europe is closely monitoring international moves as Japan has just approved the first USD-pegged stablecoin, while China has expanded the use of its digital yuan.
The U.S. is leading by establishing clear legal standards that allow the digital USD to maintain a superior position. Therefore, the EU must quickly finalize the digital euro to avoid lagging behind in the global digital currency competition.
Frequently Asked Questions
What is the digital euro?
The digital euro is the digital version of the euro issued by the European Central Bank, aimed at facilitating safe and convenient digital payments.
Why is Europe considering public blockchain?
Public blockchain helps the digital euro easily access global cryptocurrency markets, increasing usability and innovation.
What is the biggest risk of using public blockchain for the digital euro?
The risk is that transactions are very transparent, potentially leaking personal financial data, affecting user privacy.
How do stablecoin laws in the U.S. affect the EU?
The U.S. GENIUS Act creates legal and timely pressure on the EU to swiftly finalize the digital euro to maintain financial standing.
Will the digital euro replace cash?
No, the digital euro is designed to complement, not replace, cash in circulation.
Source: https://tintucbitcoin.com/ethereum-solana-trong-tam-nhin-euro-ky-thuat-so/
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