Bundesbank President Nagel Advocates for Digital Euro and Euro Stablecoins

In light of growing geopolitical uncertainties, Bundesbank President Joachim Nagel clearly positioned himself in favor of the digital euro at the New Year's reception of the American Chamber of Commerce in Frankfurt. Europe can no longer rely on transatlantic partnerships to the extent it once did and must strengthen its strategic autonomy ^[1].

The Eurosystem is working intensively on introducing a digital central bank currency, which is intended to be the first pan-European digital payment solution based exclusively on European infrastructure ^[1]. The state-guaranteed digital currency is meant to complement cash and compete with private and big tech payment providers.

In addition to the retail version for consumers, Nagel also addressed a wholesale CBDC for financial institutions. This could enable programmable payments in central bank money and drive innovation in securities settlement and the tokenization of assets ^[1].

Nagel's positive stance toward euro-denominated stablecoins is particularly noteworthy. These could support Europe's strategic autonomy and offer a cost-effective alternative for cross-border payments ^[1]. This positions the Bundesbank against the dominance of US dollar-based stablecoins such as USDT and USDC – especially in light of the recently passed US stablecoin legislation, the GENIUS Act.