Euro Sovereignty in Focus: Bundesbank President Nagel Backs Euro Stablecoins for 2026
Joachim Nagel, President of the Deutsche Bundesbank, has voiced strong support for euro-denominated stablecoins. At the American Chamber...
Quick overview
- Joachim Nagel, President of the Deutsche Bundesbank, advocates for euro-denominated stablecoins to enhance cross-border payments and safeguard the EU's monetary independence.
- He emphasizes that stablecoins offer a cheaper and faster alternative for transactions compared to traditional banking methods.
- Nagel confirms plans for a retail Digital Euro by 2029, designed to complement physical cash while prioritizing user privacy.
- The Bundesbank is exploring a Wholesale Central Bank Digital Currency to facilitate large transactions and reduce operational risks for financial institutions.
Joachim Nagel, President of the Deutsche Bundesbank, has voiced strong support for euro-denominated stablecoins. At the American Chamber of Commerce New Year’s Reception in Frankfurt, he described these assets as important for modernizing cross-border payments and protecting the EU’s monetary independence as the digital economy becomes more focused on the dollar.
Why Euro Stablecoins Are Important Now
Nagel’s remarks signal a tactical evolution in the Eurosystem’s approach to digital money. While the Digital Euro project remains a long-term priority, the Bundesbank president highlighted the immediate benefits of private, euro-pegged tokens:
- Cost and Speed: Nagel said stablecoins are a “cheaper and faster alternative” for both retail and corporate cross-border payments compared to traditional banking.
- Fighting “Dollarization”: With the U.S. GENIUS Act (passed July 2025) encouraging more dollar-pegged stablecoins worldwide, Nagel warned that Europe needs a strong euro alternative to protect its financial independence.
- Infrastructure Autonomy: He stressed that depending on non-European payment systems, like U.S. card networks or dollar-stablecoins, could make Europe’s financial infrastructure vulnerable.
Digital Euro 2029: The Plan for a “Digital Twin”
Nagel confirmed that the Eurosystem aims to launch a retail Digital Euro by 2029, as long as the required legal frameworks are in place by the end of 2026.
Key Features of the Digital Euro:
- A Digital Twin: The asset is designed to be a digital supplement—not a substitute—to physical cash.
- Privacy First: Nagel said the system is being designed with a “maximum degree of privacy,” so central banks will not be able to track how individuals spend their money.
- Pan-European Reach: The Digital Euro will be the first state-backed payment option accepted across all 20 euro-area countries.
Gestern im „Handelsblatt Today“-Podcast zur Debatte über #EuroBonds. Im Austausch mit Florian Heider habe ich klar gemacht: Die EU darf keine gemeinsamen Schulden machen, um nationale Haushaltslöcher zu stopfen. #Haushaltsdisziplin und Haftung sind Grundpfeiler der #Währungsunion pic.twitter.com/BEQytZjNYW
— Markus Ferber (@MarkusFerber) February 17, 2026
Wholesale CBDC: The Next Step in Programmable Finance
In addition to retail use, the Bundesbank has studied a Wholesale Central Bank Digital Currency (wCBDC). This system is meant for financial institutions to settle large transactions using distributed ledger technology (DLT).
- Programmable Payments: A wCBDC would let banks automate complex settlements with smart contracts, which could lower operational risks.
- The “Trigger” Solution: Nagel has previously championed “trigger solutions” that link DLT platforms directly to existing TARGET settlement services, allowing for innovation without the need for a radical overhaul of the monetary base.
The U.S. Context: GENIUS Act vs. Regulatory Lag
Nagel’s urgency is heightened by the rapid developments across the Atlantic. The GENIUS Act of 2025 established clear federal guardrails for U.S. “payment stablecoins,” treating them as regulated bank-like instruments rather than securities.
| Feature | EU (MiCA Framework) | U.S. (GENIUS Act) |
| Primary Goal | Monetary Sovereignty & Stability | Innovation & Global Dollar Supremacy |
| Issuer Requirement | EU-Authorized Credit/E-money Institutions | Federally Licensed Banks or Non-Banks |
| Yield/Rewards | Strictly Prohibited | Stalled Debate (CLARITY Act pending) |
| Reserve Backing | 100% High-Quality Liquid Assets | 1:1 Cash or U.S. Treasury Bills |
The Verdict: A Pro-Active 2026 for the Euro
Joachim Nagel’s stance marks a departure from the purely defensive rhetoric of previous years. By touting the benefits of both CBDCs and private stablecoins, the Bundesbank is positioning the euro area to lead in regulated digital finance.
Analyst Insight: “Nagel is essentially calling for a ‘Euro Shield.’ By encouraging euro-denominated stablecoins, he’s trying to ensure that when global firms settle trades on-chain, they have a reason to choose the euro over the dollar.”
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