A European Central Bank adviser believes a central bank digital currency (CBDC) alone won’t challenge US dollar-pegged stablecoins. Options include euro-pegged stablecoins, DLT applications, and the digital euro. The ECB is focusing on Euro-based stablecoins as a response to the US stablecoin push, aiming to reinforce the euro’s international role.

Bank of Italy Governor Fabio Panetta noted slow adoption of euro-pegged stablecoins despite regulatory frameworks like MiCA. The ECB approved DLT pilot projects Pontes and Appia to strengthen Europe’s payment infrastructure. Europe is considering a multi-pronged approach to address US stablecoin dominance, rather than solely focusing on the digital euro.

ECB officials are concerned about US leadership in digital finance. The digital euro project is seen as a way to preserve the eurozone’s monetary sovereignty. The ECB Governing Council will decide whether to move forward with the digital euro launch by the end of 2025. Europe’s response to US leadership in stablecoins involves a multi-faceted strategy.

Read more at Cointelegraph: Digital Euro No Silver Bullet to USD Stablecoins: ECB Adviser