Bundesbank President Wants Euro-Pegged Stablecoins to Prevent Dollarization
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by Simon ChandlerFebruary 19, 2026
AI-Generated Deep Dive Summary
The President of the German Bundesbank, Joachim Nagel, has proposed introducing euro-denominated stablecoins as a way to enhance the euro's international role and counteract potential dollarization risks posed by USD-pegged stablecoins. Speaking at an event in Germany, Nagel emphasized that such stablecoins could offer low-cost cross-border payments for both individuals and businesses while addressing concerns about Europe becoming too reliant on the US dollar. He also highlighted the importance of maintaining European monetary policy effectiveness and sovereignty in a rapidly evolving financial landscape.
Nagel's proposal aligns with ongoing efforts by the Eurosystem to develop a digital euro, which is expected to be the first pan-European retail digital payment solution. The ECB aims to launch the digital euro by 2029, though discussions about its features and implementation are still underway. Nagel also mentioned the potential development of a wholesale central bank digital currency (CBDC), which would allow institutional actors to execute programmable transactions in central bank money. This initiative is part of broader efforts to leverage emerging technologies to strengthen Europe's financial systems.
However, not everyone agrees that stablecoins are the best solution. Some commentators have suggested that tokenized deposits might be a more effective alternative for mitigating dollarization risks. Nagel acknowledged these concerns but argued that the benefits of euro-pegged stablecoins and CBDCs outweigh potential downsides. He also dismissed fears of significant dollarization occurring in Europe, noting that Europeans generally have confidence in their own currencies.
The debate over stablecoins and digital currencies reflects a broader shift in how global finance is being reshaped by technology. For crypto enthusiasts, Nagel's stance underscores the growing recognition of blockchain-based solutions in traditional financial systems. While risks remain, his proposal highlights the potential for stablecoins to enhance payment efficiency and uphold monetary sovereignty, making them a key area of focus for both regulators and the crypto community.
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Originally published on Decrypt on 2/19/2026