The European Central Bank (ECB) has officially proposed the implementation of a Central Bank Digital Currency (CBDC), named the Digital Euro, which is set to be operational by October 2025.
Pierre Gramegna, director of the European Stability Mechanism (ESM), expressed that the recent endorsement of cryptocurrencies by former US President Donald Trump could pose financial challenges for the European Union (EU). Gramegna further voiced concerns regarding the US’s support for stablecoins.
According to a Reuters report from March 10, 2025, “European lawmakers are expressing increased skepticism regarding the ECB鈥檚 digital euro initiative following an outage in the ECB鈥檚 current payment system that impacted countless households and traders.”
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Urgency for CBDC or Digital Euro Initiative
Gramegna stated, “If successful, this could influence the monetary sovereignty and financial stability of the euro area. The necessity for this digital euro has never been more pressing.” These remarks were made during the press conference following the Eurogroup meeting.
Markus Ferber, representing the European People鈥檚 Party, criticized the ECB, noting, “This incident raises legitimate concerns about the ECB鈥檚 reliability; how can it manage a digital euro when it struggles to maintain its daily operations?”
In the past month, the ECB announced its readiness to initiate the preparation phase for the implementation of the digital euro, with ECB executive board member Piero Cipollone commenting on Trump鈥檚 backing of stablecoins, remarking that it could lead to heightened urgency in launching the digital euro project.
Cipollone also expressed worry about the adoption of US-based stablecoins, emphasizing that if these are used for payments in Europe, it could result in a significant transfer of deposits from European banks to US financial systems.
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Will the EU Engage in a Conflict Over Crypto?
The EU is conducting ongoing investigations into OKX for allegedly laundering $100 million from the Bybit breach that occurred in February 2025, with the European bloc threatening to revoke OKX’s MiCA license.
European regulators are reportedly probing OKX鈥檚 decentralized trading and self-custody features, claiming that they were utilized by the Lazarus Group鈥攁 hacking collective believed to be backed by North Korea鈥攖o launder some of the stolen funds from Bybit.
In February 2025, hackers breached Bybit, extracting over $1.4 billion from one of its secure wallets. Although the exchange remains operational without interruptions to withdrawals, this event significantly undermined confidence within the sector, bringing renewed scrutiny to exchanges that previously avoided breaches.
The ongoing investigation, which could jeopardize OKX’s operational license within the EU, brings forth crucial discussions regarding regulatory compliance under the Markets in Crypto-Assets (MiCA) framework.
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Global Central Banks Delay CBDC Projects
Meanwhile, the Official Monetary and Financial Institutions Forum (OMFIF) and Giesecke + Devrient (G+D) recently published a survey on CBDCs on February 11, 2025.
The report indicated that approximately 30% of central banks have postponed their CBDC initiatives, although 67% remain committed to launching CBDCs in the future.
There’s significant hesitance surrounding the introduction of CBDCs, as highlighted by the report’s findings. Cited reasons for delays include legislative challenges and explorations of various solutions.
Concerns about privacy arise, as critics warn that enabling CBDCs might grant governments excessive scrutiny over transactions without any oversight. This skepticism intensified following Donald Trump鈥檚 ban on labor related to the digital dollar, further spurred by Federal Reserve Chair Jerome Powell鈥檚 firm stance on discontinuation.
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Key Takeaways
- The ECB has laid out a timeline for launching a CBDC, targeting operational status by October 2025.
- Skepticism towards Bitcoin reserves continues to permeate Europe.
