Official announcement from the European Central Bank or European lawmakers

ECB Advances Digital Euro Plans as Trump Backs Stablecoins, Prototype Development Set for 2025

Jan 25, 2025, 12:30 AM

The European Central Bank (ECB) is accelerating efforts to introduce a digital euro in response to U.S. President Donald Trump's recent executive order promoting dollar-backed stablecoins globally. The order, signed on January 23, prohibits the establishment of a central bank digital currency (CBDC) in the United States while supporting the growth of stablecoins, which are pegged to assets like the U.S. dollar. ECB board member Piero Cipollone warned that this move could disintermediate European banks by drawing clients and fees away from traditional banking systems. The ECB has been experimenting with digital euro technologies and plans to cap holdings and ensure they are not interest-bearing to address concerns from eurozone banks about losing deposits. The ECB is set to begin prototype development this year, with the final decision on launching the digital euro dependent on European lawmakers' approval. Cipollone emphasized that a digital euro is necessary to maintain the competitiveness of Europe's financial system and counter the potential dominance of dollar-backed stablecoins. According to the Atlantic Council, 44 countries, including China, Russia, and Brazil, are conducting pilot projects for CBDCs.