• Bundesbank backs euro CBDC and stablecoins to boost payment independence across Europe.
• Nagel warns dollar stablecoins could weaken EU monetary policy and sovereignty.
• US stablecoin law and CLARITY Act talks shape global digital asset regulation debate.

Joachim Nagel, president of Germany’s central bank, the Deutsche Bundesbank, backed a euro-pegged central bank digital currency for retail use. He also supported euro-denominated stablecoins for payments across the European Union. Nagel delivered his remarks at the New Year’s Reception of the American Chamber of Commerce in Frankfurt. His comments signal stronger momentum behind Europe’s digital currency strategy.

Nagel said European officials are advancing work on a retail CBDC. He noted that policymakers aim to strengthen Europe’s payment autonomy. In addition, he said euro-denominated stablecoins could support cross-border transactions. He linked both tools to greater independence in payment systems and solutions.

Focus on Programmable and Cross-Border Payments

Nagel highlighted the role of a wholesale CBDC for financial institutions. He explained that such a system would enable programmable payments in central bank money. As a result, banks could automate complex transactions with greater efficiency. This approach could also modernize settlement infrastructure across the euro area.

At the same time, he pointed to the utility of euro-denominated stablecoins. He said these tokens could facilitate low-cost cross-border payments for individuals and companies. Therefore, they could complement existing payment rails within the European market. His remarks suggest a dual-track approach combining public and private digital money.

However, Nagel previously warned about risks linked to foreign stablecoins. At a recent Euro50 Group meeting, he raised concerns about US dollar-denominated tokens. He cautioned that a dominant dollar stablecoin market share could impair domestic monetary policy. Moreover, he warned that European sovereignty could weaken under such conditions.

US Stablecoin Law Shapes Global Debate

Nagel’s comments came months after US President Donald Trump signed a bill creating a framework for payment stablecoins. The law outlines regulatory standards for dollar-pegged tokens in the United States. It will take effect 18 months after signing or 120 days after related regulations are finalized. This timeline could give US dollar stablecoins a regulatory advantage.

Meanwhile, lawmakers in Washington are debating broader digital asset rules. Senators are reviewing the CLARITY Act, which aims to establish a comprehensive framework for cryptocurrencies. The bill has drawn input from banking and crypto industry representatives. However, disagreements remain over how the legislation should address stablecoin rewards.

The debate over yield features has divided industry leaders and banking executives. Some argue that stablecoin incentives could disrupt traditional deposits. Others believe clear rules would enhance market stability.