A widening divide over the future of money: the U.S. backs regulated private competition, while Europe puts the ECB and incumbent banks at the centre.
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Washington is backing regulated private money. Brussels and Beijing are putting public institutions at the centre. That choice may decide whether the internet of money runs on dollars or euros.
Regulation, not just code, will decide the future of money.
A clear divide has emerged.
The United States has enacted a federal framework for private stablecoins. Congress has also voted to block the Federal Reserve from issuing a digital dollar to the public through 2030. Britain is moving towards a similar market-led system.
Europe is taking a different path. The European Central Bank is developing its own retail digital euro, while EU rules give commercial banks structural advantages over independent non-bank issuers.
Of course Europe and China are fundamentally different political systems. But their digital-money strategies share one defining feature: both put public institutions at the centre.
China’s e-CNY is issued by the central bank. Banks and payment companies distribute it, but the People’s Bank of China controls issuance and the core architecture.
The Anglo-American model starts elsewhere. Government sets safety standards. Public institutions support all market participants on equal terms. Private firms then compete to build the products and networks.
This is the real divide. It is not simply public money versus private money. It is central design versus market discovery, incumbents versus entrants, and managed markets versus competition.
Politicians in America. Technocrats in Europe.
In the same 48 hours in June, America and Europe moved in opposite directions on central bank digital money. On June 22, the U.S. Senate voted 85 to 5 for legislation that would prohibit a retail Federal Reserve digital currency through the end of 2030. Donald Trump had made the issue part of his election campaign and, four days after returning to office, ordered federal agencies to stop work on one.
On June 23, the European Parliament’s economics committee voted 43 to 14, with one abstention, to advance the digital euro.
The timing was symbolic. America said no. Europe said yes.
In America, central bank digital money was an electoral issue. In Europe, it remains largely a technocratic project.
That partly reflects the EU’s structure. It is a union of 27 countries and 24 official languages. Political debate remains overwhelmingly national, while the ECB operates above national politics.
No single national electorate has a direct say over the ECB’s priorities. National politicians also have little incentive to campaign on a supranational monetary project.
The digital euro therefore has travelled a long way on ECB autopilot. By the time elected politicians will confront it, much of the architecture will have been designed.
Marieke Flament, a former Circle executive and now a board member of euro stablecoin project Qivalis, captured the sense that Europe was waking up late to the consequences:
What a day… For now, Europe and China’s playbooks seem more similar than that of the US.
An EU Council official interviewed for this article was blunter:
The EU indeed moves to a Chinese model with just a European flag.
Of course Europe and China are not equivalent political systems. But on digital money, both treat retail payment rails as strategic infrastructure to be designed from the center, with private companies operating inside the resulting architecture.
The United States emphasizes common rules, private issuers and competition. One relies on central design. The other relies on market discovery.
The question for Europe is straightforward: should public institutions build the main product, or provide neutral infrastructure on which regulated firms compete?
Europe Tilts the Field
To understand why this matters, it helps to understand how money already works.
Modern money has two tiers. Central banks issue cash and reserves. Commercial banks create most of the digital money used by households and businesses.
The central bank anchors the system. Commercial-bank deposits are convertible and settle at face value in central bank money.
This preserves the “singleness of money”: a euro remains a euro, regardless of which bank issued it.
Stablecoins place private money on new digital rails. They open the market to new issuers, technology and services.
But, Europe’s digital-money framework now contains three market groups.
The ECB plans to issue a public digital euro. Banks and regulated non-bank issuers can issue euro stablecoins. All three groups can offer digital forms of euro-denominated money. But they do not compete on equal terms.
The ECB is both a prospective issuer and the gatekeeper to central-bank settlement infrastructure. Commercial banks can hold central bank reserves and obtain central bank liquidity. Non-bank issuers cannot safeguard customer funds at the central bank.
ECB Decision 2025/222 allows qualifying non-bank payment firms to open settlement accounts, but expressly prevents them from using those accounts to safeguard customer money.
MiCA also requires non-bank issuers of euro stablecoins to place at 30% to 60% of customer funds in deposits with commercial banks. Those banks may also be their competitors.
Europe has created a hierarchy: the ECB first, commercial banks second and independent issuers third. Banks remain closest to risk-free public money. New entrants must depend partly on them.
This is not a minor technical distinction. It affects which forms of digital euro are safest, who bears commercial-bank risk and whether all digital euros remain convertible one-for-one when markets come under stress.
Europe’s rules protect the ECB and incumbent banks within the euro area. But winning at home is not the same as winning globally.
The real contest is between the euro, the dollar and other currencies on the emerging internet of money. Success will depend on which products and networks win the trust of companies, developers and users around the world.
Domestic privilege does not guarantee global adoption.
What the Rules Produce
The consequences are already visible.
Europe’s stablecoin initiative, Qivalis, brings together 37 banks across 15 countries. Its members include BNP Paribas, ING, UniCredit and BBVA.
In the United States, Open USD is being developed by more than 140 companies. They include Visa, Mastercard, Stripe, Coinbase, BlackRock and Google, spanning banking, payments, technology, asset management and crypto.
Both projects aim to create trusted private digital money. But one is a consortium of incumbent banks. The other is a broad commercial ecosystem.
Europe is producing a banking club. America is producing a market.
That difference is not technological. It is the result of regulatory design.
The Bigger Picture
Europe may also be missing a larger strategic opportunity.
Elliott Hentov, chief macro policy strategist at State Street Investment Management, argues that euro stablecoins could become more than payment products. If backed by a transparent and diversified pool of euro-area government bonds, they could approximate a European safe asset, create structural demand for euro debt and strengthen the currency’s international role.
He also warns that forcing substantial reserves into commercial-bank deposits could make euro stablecoins less resilient during financial stress.
Stablecoin policy, he argues, should be treated as a strategic instrument, not a peripheral regulatory file.
That exposes the contradiction at the heart of Europe’s approach.
Its rules may strengthen the ECB and incumbent banks inside Europe while weakening the euro’s ability to compete beyond it.
The internet of money will not be won by the institutions receiving the greatest protection at home. It will be won by the currencies, products and networks that attract the best builders and the most users.
Europe’s technocrats have designed the system.
Its political leaders still have to decide whether it can win.