Joachim Nagel said euro-pegged stablecoins would offer the bloc more independence from US dollar-pegged coins, which is able to soon be permitted under the GENIUS Act.
Joachim Nagel, President of the German Bundesbank, supported the introduction of a euro-pegged central bank digital currency (CBDC) and euro-denominated stablecoins for payments.
Speaking for a speech on the American Chamber of Commerce's New Year's Reception in Frankfurt on Monday, Nagel said EU officials are working “hard” on launching a retail CBDC. Euro-denominated stablecoins could also help “make Europe more independent when it comes to payment systems and solutions,” in accordance with the central bank governor.
“Specifically, a wholesale CBDC would enable financial institutions to make programmable payments in central bank money,” Nagel said. “I also see benefits in euro-denominated stablecoins as they could be used for cross-border payments by individuals and businesses at low price.”
Nagel's comments come months after U.S. President Donald Trump signed a bill establishing a framework for payments stablecoins within the country, potentially putting dollar-pegged stablecoins on the trail to questioning a possible launch of a euro-pegged counterpart. The law is predicted to be fully implemented 18 months after its signing or 120 days after the ultimate adoption of the relevant regulations.
The German Central Bank president's comments on stablecoins didn’t include risks that he mentioned last week on the Euro50 group meeting. Nagel warned that if U.S. dollar-denominated stablecoins had a significantly larger market share than a euro-pegged coin, domestic monetary policy “might be significantly affected, not to say that European sovereignty might be weakened.”
Stablecoin yield is the topic of the US bill
Washington lawmakers and White House officials have met with banking and crypto industry representatives ahead of a possible vote on the CLARITY Act within the US Senate. The bill, which is predicted to offer a comprehensive regulatory framework for digital assets, divides many crypto industry and banking leaders as a consequence of its approach to stablecoin rewards, which has yet to be finalized in laws.
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