German Central Bank President Advocates for Euro-Pegged Stablecoin to Prevent Dollarization

Odaily News: Joachim Nagel, a member of the European Central Bank's Governing Council and President of the German Federal Bank (Bundesbank), stated in a speech at the German American Chamber of Commerce that launching a euro-denominated stablecoin could provide low-cost cross-border payment services for individuals and businesses and address the dollarization risks posed by dollar-pegged stablecoins. Joachim Nagel pointed out that if domestic currencies are replaced by dollar-pegged stablecoins, it would be equivalent to the dollarization of the relevant economies, potentially severely undermining the effectiveness of domestic monetary policies and European sovereignty. Currently, the European Central Bank is evaluating the potential use of distributed ledger technology in non-central bank money, including tokenized deposits and euro stablecoins, and plans to launch a digital euro in 2029. Additionally, the European Central Bank is also developing a wholesale CBDC to allow institutional participants in financial markets to execute programmable transactions.