German Federal Bank President Suggests Launching Euro Stablecoins to Address Dollarization

Joachim Nagel, President of the Federal Bank of Germany, stated in a speech at the American Chamber of Commerce in Germany that the launch of a stablecoin denominated in euros can provide low-cost cross-border payment services for individuals and businesses, and address the dollarization risk brought by the stablecoin denominated in US dollars. He pointed out that replacing domestic currencies with stablecoins would lead to dollarization of the economy, weaken the effectiveness of monetary policy, and undermine European sovereignty. At present, the European Central Bank is evaluating the application of distributed ledgers in non central bank currencies, including tokenized deposits and Euro stablecoins, and plans to launch a digital Euro in 2029, while developing wholesale CBDCs to support financial market institutions in executing programmable transactions.