The US Anti-CBDC Surveillance State Act & the GENIUS Act were clear political messages. They marked a radical shift in the US dollar’s digitalisation path. Washington has signalled its stablecoin ambitions, and the private sector is listening. Waves of banks and private actors are racing to launch their own coins to ride the coming wave of dollar-stablecoin market.

Across the Atlantic, the Eurozone is failing to move forward in monetary digitisation. In Europe, private banks and the European Central Bank (ECB) are advocating for different options, each promoting its own interests. The European debate over the digitalisation of the euro has evolved into a standoff between competing visions of monetary governance. While the ECB has been vocal about pursuing the rCBDC option, private banks are using the momentum in the US to reaffirm the role of private issuers in the digital economy through Euro stablecoins. The reality is that both these routes carry inherent risks and opportunities. However, in this stalemate, the greatest threat to European monetary sovereignty is not the path chosen, but rather the speed at which the EU moves.

Since the inception of the Digital Euro project, the central argument for its issuance has been clear: the Eurozone is dangerously over-reliant on U.S.-led payment infrastructure (e.g. Visa and Mastercard). Today, despite the existence of European alternatives along the digital payment value chain, such as Carte Bancaire (CB) and MB Way, a clear sovereignty gap remains. Historical insufficiencies have led to more than half of card transactions in the eurozone area being processed by non-European actors. For a European Commission obsessed with strategic autonomy, the Digital Euro makes sense. It is a defence mechanism against the dominance of American ecosystems.

Detractors of the Digital Euro, notably crypto-enthusiasts, have consistently framed the project as a dystopian ambition of monetary control and surveillance. However, the recent closing report on the preparation phase of the project has addressed these issues through data minimisation and an offline “cashlike” mode. Where critics of the project are correct is in their scrutiny of the project’s slow development and the proposed holding limits on accounts. These criticisms are valid because they go beyond mere technical privacy details; they represent a genuine contradiction between the Digital Euro’s ambitions and its development. The Digital Euro faces a dual crisis of timing and design that could ultimately render the project irrelevant if current issues are not addressed quickly.

Before its issuance, the Digital Euro needs to undergo a piloting phase, which typically lasts several years. For instance, the Chinese E-CNY, Beijing’s version of the Digital euro, has been piloting since 2019. Thus, Europeans are far from being able to actually use the currency, as EU officials stated that it might be “ready for a potential first issuance” only in 2029. However, the fact is that the issuance remains contingent on the European legislative procedure. While the European Parliament has finally tabled its initial draft report, the project’s polarising nature likely means that the negotiations won’t be straightforward.

Beyond this temporal dimension, the very design of the Digital Euro, most notably its €3,000 holding cap, sets barriers. Yes, such a design limits the potential of both bank runs and disintermediation; however, refusing to make the digital euro a savings vehicle also reduces the rationale for its adoption. What benefit is there for using the currency if it is just a less practical version of the status quo? A digital euro that arrives in five years and does not incentivise users to adopt it is a project that sets itself up to fail.

But limitations don’t end here. Despite ongoing closed-door discussions, the ECB still lacks genuine support from private banks. The US market’s surge towards Stablecoins has motivated European Banks. Instead of waiting for Frankfurt, in December 2025, Europe’s banking giants have decided to take their own path. Through a joint venture, ten major banks, including BNP Paribas, Danske Bank, and ING, have unveiled the launch of “Qivalis“, a MiCA-compliant euro stablecoin, which is scheduled for launch in 2026.

What does this mean for the digital euro? Simply, it faces the very real threat of being crowded out before it even launches. For the European citizen, ‘sovereignty’ or ‘design’ are secondary concerns. The most important drivers for adoption are practicality and accessibility, two areas where the digital euro falls short. Even if the ECB maintains that rCBDCs and stablecoin tools are complementary, the reality is that one will inevitably overshadow the other. If the Digital Euro cannot win the race for adoption, the ECB must accept it, because higher stakes of monetary sovereignty are at play.

The worst-case scenario isn’t digitalisation led by regulated EU private banks, but rather the arrival of dollar-stablecoins within a Eurozone with no concrete domestic alternatives. And with US-backed stablecoins set to dominate the market by 2026, this moment could arrive sooner than expected. Today, we use American systems, but we still use our own currency. Yet, returning to the GENIUS act and its effects, a dollar stablecoin could mean “digital dollarisation” in the EU. This would drain European citizens’ bank deposits in euros and undermine the Eurozone’s monetary sovereignty.

And this does not account for any of the more serious threats of dollarisation. By outsourcing our digital currency to US issuers, we expose the Eurozone to US regulatory gaps. When dollar stablecoins across various jurisdictions face redemptions, volatility in the US means that treasuries will ripple across the Atlantic. The ECB then has to react to the imported financial consequences. Ultimately, these effects undermine the core ambition of our digitalisation. What will be our monetary sovereignty then?

In the race to digitalise money, which has already begun, the search for the best tool to achieve monetary independence can’t wait. Facing the threat of digital dollarisation, euro stablecoins are a far better option than no euro at all. If the ECB cannot deliver a tool that works in time, it must empower the European private actors who can.