The President of the German Federal Bank hopes to launch a stablecoin pegged to the euro to prevent dollarization.

Sum upEuropean Central Bank's Nagel pointed out that euro-denominated stablecoins can reduce cross-border payment costs and address the risks posed by dollar stablecoins. He emphasized that if dollar stablecoins replace domestic currencies, it could weaken the effectiveness of monetary policy. Currently, the European Central Bank is evaluating distributed ledger technology and plans to launch the digital euro in 2029. Odaily Planet Daily reports that Joachim Nagel, a member of the European Central Bank Governing Council and President of the German Federal Bank, stated in a speech at the German-American Chamber of Commerce that launching euro-denominated stablecoins can provide low-cost cross-border payment services for individuals and businesses, and address the dollarization risk posed by dollar stablecoins. Joachim Nagel pointed out that if domestic currency is replaced by dollar stablecoins, it would be equivalent to dollarization of the relevant economy, which could severely weaken the effectiveness of domestic monetary policy and European sovereignty. Currently, the European Central Bank is evaluating the possibility of using distributed ledger technology in non-central bank currencies, including tokenized deposits and euro stablecoins, and plans to launch a digital euro in 2029. Additionally, the European Central Bank is developing wholesale CBDC to enable participation by financial market institutions in programmable transactions.

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