Joachim Nagel said that euro-pegged stablecoins will provide greater independence from USD-pegged coins, which will soon be allowed under the GENIUS law.
Joachim Nagel, president of Germany’s central bank, the Bundesbank, has backed the introduction of a central bank digital currency (CBDC) pegged to the euro and a euro-denominated stablecoin for payments.
In remarks prepared for a speech at the American Chamber of Commerce’s New Year’s reception in Frankfurt on Monday, Nagel said EU officials were “working hard” to introduce a retail CBDC. According to the central bank’s president, euro-denominated stablecoins could also contribute to “increasing Europe’s independence in terms of payment systems and solutions.”
“In particular, a wholesale CBDC would allow financial institutions to make programmable payments in central bank money,” Nagel said. “We also see benefits in euro-denominated stablecoins that can be used at low cost for cross-border payments by individuals and businesses.”
Nagel’s comments come months after US President Donald Trump signed into law a bill establishing a domestic payments stablecoin framework, potentially putting USD-pegged stablecoins on the path to contesting the possible deployment of euro-pegged stablecoins. The law is expected to become fully effective 18 months after signing, or 120 days after related regulations are finalized.
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The German central bank chief’s comments on stablecoins did not include the risks mentioned at last week’s Euro50 group meeting. Nagel warned that if USD-denominated stablecoins were to gain a significantly larger market share than euro-pegged coins, “domestic monetary policy could be seriously undermined, not to mention the potential weakening of European sovereignty.”
Stablecoin yields at issue in U.S. bill under consideration
Washington lawmakers and White House officials are meeting with representatives from the banking and cryptocurrency industries ahead of a potential vote on the Clarity Act in the U.S. Senate. The bill is expected to provide a comprehensive regulatory framework for digital assets, but its approach to stablecoin rewards, which has not yet been finalized as a bill, has divided opinion among many cryptocurrency industry and banking leaders.
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