Europe's top central banker just made a bold call. Bundesbank President Joachim Nagel told business leaders in Frankfurt that euro stablecoins could transform cross-border payments. He said individuals and firms could use them at low cost.
He made these remarks on February 16, at the AmCham Germany New Year's Reception. The timing was no accident.
Europe's Biggest Vulnerability Just Got Named
The US-EU trading relationship is massive. Combined, both economies account for 44% of global GDP and 30 percent of global trade. German exports alone — nearly 20% — flow into US markets.
That relationship now faces strain. Nagel said the transatlantic partnership's "solid ground" looks shaky. The US administration is shifting away from past multilateral commitments, according to the Bundesbank speech.
Mutual EU-US direct investment hit 5.4 trillion euros in 2023. That figure dwarfs EU investment in China and India combined — by more than five times.
Not anymore.
Big changes ahead.
Nagel pointed to geoeconomic fragmentation as a real growth killer. It slowed EU competitiveness over recent years. Europe must act decisively, he argued.
Digital Euro Arrives. But Stablecoins Too?
The Eurosystem is pushing a digital euro forward. This retail CBDC would be Europe's first pan-European digital payment solution. Built entirely on European infrastructure.
But Nagel went further. Euro-denominated stablecoins, he said, hold real merit. They enable programmable, low-cost cross-border transactions. This is where the euro stablecoins conversation gets real.
The Bundesbank chief also flagged wholesale CBDC progress. That version lets financial institutions use central bank money for programmable payments. Exploratory work on that front was already completed, the speech confirmed.
Regulations also got Nagel's sharp attention. Europe's rules are too complex and rigid. He cited the Letta and Draghi reports, which called for sweeping EU regulatory simplification. The European Commission is already taking on that challenge, per the official speech transcript.
Nagel himself sits on the ECB High-Level Task Force for simplifying financial regulation. That group was formed by the Governing Council specifically for this purpose.
The Savings and Investments Union also came up. Europe's capital markets remain fragmented despite 30+ years of the single market. High EU savings aren't flowing into innovation. That's a problem Nagel wants fixed urgently.
Three priorities define his vision: simpler rules, deeper capital markets, and a stronger global euro role. Euro stablecoins fit squarely into that third pillar.
