ECB To Accelerate on Digital Euro Adoption To Counter US Stablecoin Push

Key Takeaways

• ECB emphasized that Eurozone banks should adopt a digital euro to counter U.S. President Trump’s promotion of stablecoins.
• A digital euro would serve as an ECB-backed online wallet, enabling payments even for non-bank customers.
• ECB is engaging with stakeholders, the public, market players and legislators to ensure the digital euro meets market needs.

As interest in stablecoins rises, the European Central Bank stressed the need for a digital euro to compete with U.S. dollar-backed cryptocurrencies.

The ECB’s digital euro project aims to offer secure, innovative payment solutions, reducing reliance on non-European providers. A decision on its future will be made in 2025.

Banks Should Adopt Crypto

Progress on ECB CBDC

The Eurosystem’s digital euro project aims to introduce central bank money in digital form to complement cash, enabling free, secure and easy payments across the euro area.

It aims to reduce Europe’s reliance on non-European payment providers and improve market competition. According to the ECB, the digital euro would provide new opportunities for payment services and strengthen monetary sovereignty.

A two-year preparation phase started on Nov. 1, 2023, focuses on drafting a digital euro rulebook, selecting providers and conducting research and experimentation to ensure the highest quality, security and usability standards. By 2025, the ECB Governing Council will decide on the next phase based on EU legislation.

From May to October 2024, the ECB made some progress. These include completing the first draft of the digital euro rulebook and launching new workstreams. Efforts also continue designing the digital euro, including defining holding limits and offline functionality.

What’s Next

The ECB will produce an updated version of the digital euro rulebook in the coming months. This will also incorporate feedback from the first draft.

Based on insights from the October ERPB technical session, future sessions in the second quarter of 2025 will focus on competition, synergies and business models for PSPs. These discussions aim to identify the benefits and mitigate potential risks or unintended consequences of the digital euro.

Regarding user research, the team will analyze general segmentation, user preferences for holding limits, and conduct studies with vulnerable groups and small merchants.

Additionally, innovation partnerships will be established to explore conditional payments and other use cases, with a report expected in July 2025.

In 2025, the ECB aims to conclude the procurement process for selecting potential providers, evaluating offers for both external and internal components.