EU Reportedly Explores Ethereum and Solana for Digital Euro Development
The European Union is reportedly investigating the potential integration of public blockchain networks, specifically Ethereum and Solana, for the development of its forthcoming digital euro. This exploration, as indicated by a Financial Times report, signals a significant strategic pivot away from the private, permissioned blockchain models often favored by central banks, such as China’s digital yuan (CBDC). The move suggests a potential embrace of more decentralized technologies for a major sovereign digital currency initiative.
Strategic Shift Towards Open Ledgers
The consideration of public blockchains like Ethereum and Solana for the digital euro highlights a growing interest in the benefits of open, decentralized ledger technologies. Unlike private CBDC frameworks, which typically operate on centrally controlled networks with restricted access, public blockchains offer greater transparency, potential for broader interoperability, and a more dynamic ecosystem for innovation. This approach could position the digital euro as a more adaptable and globally integrated payment system, fostering a wider range of applications and user engagement.
This exploration represents a stark contrast to the development path taken by the People's Bank of China with its digital yuan, which is built on a private blockchain infrastructure, emphasizing centralized control and surveillance capabilities. For the EU, leveraging established public networks could potentially mitigate some development costs and accelerate adoption by tapping into existing blockchain communities and infrastructure. However, such an undertaking would also necessitate addressing significant challenges related to scalability, regulatory compliance, security, and maintaining monetary stability within a potentially volatile technological environment. The EU's ongoing research into these platforms suggests a thorough evaluation of both their advantages and complexities.