The European Union is accelerating development of a digital euro amid concerns about competitiveness after the passage of a new law in the United States to regulate stablecoins, the Financial Times reports. The US Congress last month approved a key law regulating the $288 billion stablecoin market, which is largely pegged to the dollar, the newspaper recalls.

The passage of the so-called Genius Act has forced European officials to “rethink their plans for a digital euro,” a participant in the discussions told the publication. Officials are now considering launching the digital currency on a public blockchain like Ethereum or Solana, rather than a private one as previously planned, people familiar with the matter explained.

The rapid passage of the US law “has alarmed a lot of people,” one of the people added. According to him, European officials are now saying: “Let’s speed up, let’s push.” The European Central Bank has been working for several years on the potential creation of a digital version of the euro that would be free to use across the eurozone, the FT emphasized.

EU officials fear that the new US legislation will encourage the already growing use of dollar-backed tokens, the newspaper notes. The newspaper cites ECB Executive Board member Piero Cipollone, who said in April that the US government's promotion of dollar-backed stablecoins "raises concerns about Europe's financial stability and strategic autonomy."

Using a public blockchain is "certainly something that European officials are now considering more seriously," one of the sources added. At the same time, the ECB told the FT that it is considering "a variety of technologies, both centralized and decentralized, in developing a digital euro, including distributed ledger technologies." The department stressed that no decision has yet been made on this issue.