Digital Euro on Ethereum or Solana: Risks and Opportunities

European officials are considering issuing a digital Euro (#CBDC ) on public blockchains like Ethereum or Solana, rather than a centralized system. This move comes in response to competitive pressure after the U.S. passed stablecoin legislation.

Potential and Advantages

According to experts, implementing a digital Euro on a #blockchain public blockchain would significantly expand its usability. It could integrate into decentralized finance (DeFi) systems, global wallets, and cross-border payments without needing to be rebuilt from scratch. Ethereum offers robust programmability, while Solana provides high speed and low fees. This would help the Euro better compete with USD-backed stablecoins that dominate the market.

Challenges and Risks

However, this model also raises several serious concerns. Privacy is a top issue, as public blockchains may conflict with EU data protection regulations (GDPR). Technical risks also exist, such as Ethereum's scalability limits and Solana's stability. Furthermore, this could shift deposits away from traditional banks, impacting financial stability.

Currently, the European Central Bank (#ECB ) is still testing various technologies and has not made a final decision.