Bundesbank Chief Backs Digital Euro and Stablecoins to Boost Payment Independence
- Nagel supports both a retail digital euro and euro-denominated stablecoins as tools to strengthen Europe’s payments autonomy.
- He argues wholesale CBDCs would enable programmable central bank money, while stablecoins could lower cross-border transaction costs.
- His remarks come amid US regulatory moves on dollar-backed stablecoins and renewed concerns about monetary sovereignty.
Deutsche Bundesbank President Joachim Nagel has endorsed the introduction of a euro-pegged central bank digital currency and euro-denominated stablecoins, arguing they could reinforce Europe’s autonomy in payments.
In prepared remarks delivered at the New Year’s Reception of the American Chamber of Commerce in Frankfurt, Nagel said European Union officials were “working hard” on launching a retail CBDC. He added that euro-denominated stablecoins could help make Europe more independent in payment systems and solutions.
Nagel stated that a wholesale CBDC would enable financial institutions to conduct programmable payments using central bank money. He also said he sees merit in euro-denominated stablecoins because they can facilitate low-cost cross-border transactions for individuals and businesses.
Speaking as a member of the European Central Bank Governing Council, Nagel described euro stablecoins as a useful complement to efforts to create a digital euro. He said such instruments support cheap international transfers and align with broader work on a digital version of the common currency.
Related: Brazil and Hong Kong Link CBDC Networks in Cross-Border Blockchain Pilot Using Chainlink
US Stablecoin Framework Raises Competitive Stakes
His comments come after US President Donald Trump signed legislation establishing a regulatory framework for payment stablecoins in the United States, potentially positioning dollar-backed tokens to compete with any future euro-pegged equivalent. The law is due to be fully implemented 18 months after signing or 120 days after related regulations are finalised.
Nagel has previously cautioned that if US dollar-denominated stablecoins were to achieve significantly greater market share than a euro-pegged coin, European monetary sovereignty could be weakened. He also warned that replacing a domestic currency with stablecoins would amount to a form of dollarisation, though he characterised that risk as small.
Related: Dutch Lawmakers Approve 36% Tax on Unrealised Crypto and Investment Gains
The post Bundesbank Chief Backs Digital Euro and Stablecoins to Boost Payment Independence appeared first on Crypto News Australia.
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