Anchoring Europe’s Monetary Future: Why a Wholesale Digital Euro Is the Immediate Priority

Anchoring Europe's Monetary Future: Why a Wholesale Digital Euro Is the Immediate Priority Dollar-denominated stablecoins are expanding rapidly.For Europe, this is not merely a technological development.The deeper question is strategic: who controls the infrastructure through which money circulates?Even where prices, contracts and accounting remain denominated in euro, a growing share of transactions may be executed on dollar-based digital rails, thereby reducing the effectiveness of ECB monetary policy and weakening one of the institutional foundations on which Europe's longer-term growth increasingly depends.This article argues that dollar stablecoins are best understood as "Eurodollars on steroids": a programmable and scalable extension of the offshore dollar system.It identifies three risks for the Economic and Monetary Union: leakage of liquidity and activity from euro monetary circuits, indirect support for US fiscal power, and new forms of fragility arising from reserve opacity and redemption risk.The article further contends that a wholesale CBDC could mitigate some of the EMU's structural constraints and provide catalytic infrastructure for scalable euro-denominated stablecoins, with the potential to become the most trustworthy in the world.By contrast, retail CBDC addresses the wrong battlefield: Europe's central vulnerability lies not in payments at the till, but in the deeper monetary architecture that will shape its future monetary sovereignty.