Joachim Nagel, the president of Germany’s central bank, the Deutsche Bundesbank, has expressed strong support for the development of euro-pegged stablecoins and a central bank digital currency (CBDC) aimed at improving payment systems within the European Union.
In a speech prepared for the New Year’s Reception of the American Chamber of Commerce in Frankfurt, Nagel highlighted that EU officials are actively working towards the introduction of a retail CBDC. He stated that euro-denominated stablecoins could significantly enhance Europe’s independence from existing payment systems dominated by US dollar-pegged coins.
Implications for Payment Systems
Nagel pointed out that a wholesale CBDC could facilitate programmable payments in central bank money, which would be beneficial for financial institutions. He also noted the advantages of euro-denominated stablecoins, particularly for cross-border payments, which could be executed at a lower cost for both individuals and businesses.
Context of US Regulatory Developments
This advocacy comes in the wake of US President Donald Trump signing a bill that establishes a framework for payment stablecoins, potentially allowing US dollar-pegged stablecoins to gain a competitive edge over their euro-pegged counterparts. The implementation of this law is expected to occur 18 months after its signing or 120 days following the finalization of related regulations.
Concerns Over Market Dynamics
While Nagel’s remarks were largely positive, he previously expressed concerns regarding the risks associated with US dollar-denominated stablecoins. At the Euro50 Group meeting, he warned that a significant market share for these stablecoins could impair domestic monetary policy and undermine European sovereignty.
Ongoing Legislative Discussions in the US
In the United States, lawmakers and White House officials are currently engaging with representatives from the banking and crypto sectors ahead of a potential vote on the CLARITY Act. This legislation aims to establish a comprehensive regulatory framework for digital assets, including stablecoins, but has faced division among industry leaders regarding its approach to stablecoin rewards.
This article was produced by NeonPulse.today using human and AI-assisted editorial processes, based on publicly available information. Content may be edited for clarity and style.
