How will Europe’s central banks balance their plans for a digital euro with the growing global interest in Bitcoin? A Coinbase strategist thinks more Eurozone countries might follow the Czech Republic’s lead and add Bitcoin to their reserves. This prediction comes as Europe works hard on creating its own digital currency while watching the United States embrace crypto in a big way.
The European Central Bank has been busy developing the digital euro, which moved into its next phase after completing preparation work in October 2025. If lawmakers approve the necessary rules in 2026, Europeans might see pilot testing by 2027 and the first real digital euros by 2029. Think of it like getting a new type of money that works on your phone but is backed by the same trusted institutions that manage euros today.
Germany has taken the lead in preparing for crypto regulations under the MiCA framework. BaFin, Germany’s financial watchdog, approved 20 crypto service providers in 2025, making up 30% of all approvals across the entire European Union. This shows how seriously Germany takes building a proper foundation for digital money.
The European approach differs sharply from America’s strategy. While the Trump administration created a Bitcoin strategic reserve and banned public digital currencies, Europe prefers a public-private partnership model. The digital euro will include both retail versions for everyday people and wholesale options for banks to transfer money between themselves.
France and Germany signed a joint agreement in August 2025 emphasizing the digital euro as key to keeping Europe financially independent. They want to ensure privacy, stability, and democratic control over their money system. The proposed digital euro would let people hold up to 3,000 euros, which sits comfortably below the 10,000 euro limit for cash payments. Unlike traditional investments, Bitcoin holdings don’t generate dividend payments for central banks, making their appeal primarily based on potential price appreciation and portfolio diversification.
Despite Europe’s focus on the digital euro, some central banks are experimenting with Bitcoin on their balance sheets. This creates an interesting tension between official policy favoring the digital euro and practical curiosity about Bitcoin’s potential role in modern finance. US crypto issuers continue to dominate European markets with approximately 90% of market capitalization control. Meanwhile, approximately 80% of reviewed jurisdictions saw financial institutions announce digital asset initiatives in 2025, driven by clear, innovation-friendly regulations in the US, EU, and parts of Asia.
