Core Focus: The historical and institutional origins of the transatlantic divergence in digital currency policy, the role of Facebook’s Libra project as a critical turning point, and the different strategic responses of the EU and US.

In-Depth Notes:
The history of Central Bank Digital Currencies (CBDCs) is, in large part, a history of institutional anxiety . When Meta (formerly Facebook) announced its Libra/Diem project in 2019, central banks worldwide were confronted with an uncomfortable question: could a private technology corporation issue money at global scale and thereby erode their monopoly over monetary control? . The response was swift. CBDC projects proliferated across jurisdictions, from the Bahamas to Sweden, from China to the euro area .

The Libra Moment:
Facebook’s Libra project was a watershed moment. It demonstrated that a large technology company with a global user base could potentially create a private digital currency with significant economic and geopolitical consequences. The project was framed as a way to provide financial services to the unbanked, but it also represented a direct challenge to the monetary sovereignty of nation-states. The concern was not merely technological but political: a private corporation with a user base in the billions could potentially issue a global currency outside the control of any central bank. As one analysis noted, “European policymakers were concerned about the influence of non-European private currencies” . Alongside concerns about negative geopolitical impacts, risks to financial stability also became a focal point . The momentum dissipated to some extent when Meta abandoned the project, although some central banks, such as the European Central Bank, accelerated their efforts .

Two Rationales for the Digital Euro:
In the euro area, the institutional anxiety generated by Libra crystallised into two distinct rationales . The first is structural: as cash usage declines, central bank money risks becoming increasingly marginal in the daily lives of citizens, undermining the monetary anchor that underpins financial stability . The second is strategic: in some parts of the payments value chain, the EU remains reliant on non-European infrastructure, potentially undermining Europe’s autonomy over its own financial plumbing . Both rationales were well established before Washington’s new policies entered the picture. The European Union, unlike the United States, chose to double down on public digital money .

The US Response:
In contrast to the EU’s public-sector response, the United States took a fundamentally different path. From January 2025, President Donald Trump signed an executive order prohibiting the Federal Reserve from issuing a retail CBDC and directing federal agencies to promote dollar-backed stablecoins globally . This divergence—public digital money in Europe versus private digital money in the US—represents the most fundamental difference in approach between the two major Western economies and is shaping the global digital currency landscape. The US has introduced laws favouring private stablecoin networks over a government-issued CBDC, legitimizing private US coins as a major digital payment structure .