Bundesbank Supports Euro Stablecoins

Germany’s central bank president Joachim Nagel says euro-denominated stablecoins have a real use case as a low-cost tool for cross-border payments, but he made clear that Europe’s priority remains the digital euro and broader control over its payment rails.

Speaking at an event hosted by the American Chamber of Commerce in Germany, Nagel framed the debate around Europe’s payment independence. With transatlantic frictions and the accelerating adoption of dollar-based settlement tools, he argued that the EU needs options built on European infrastructure rather than relying on non-euro digital money.

Nagel said euro-pegged stablecoins could help individuals and companies move money internationally more cheaply and quickly than legacy systems. His comments signal a more pragmatic tone from parts of Europe’s central banking establishment, even as many officials have historically been wary of privately issued digital currencies.

The central bank’s president emphasized that the EU is pushing ahead with the digital euro, describing it as a potential pan-European retail payment solution built entirely on European rails. In his view, a state-backed digital euro is a key piece of long-term resilience, particularly if dollar-based stablecoins become widely used within Europe.

Nagel warned that if U.S. dollar stablecoins significantly outscale euro alternatives inside Europe, it could undermine monetary sovereignty and complicate policy transmission.  Officials worry that everyday digital settlement could increasingly run on a unit Europe doesn’t control.