TLDR:
- Germany backs Euro Stablecoins to protect eurozone monetary control.
- ECB warns dollar-pegged tokens may undermine EU financial policies.
- Deutsche Bundesbank supports digital euro and Euro Stablecoins for sovereignty.
- Euro Stablecoins could grow to €1.1 trillion by 2030, analysts predict.
- EU seeks faster integration to reinforce financial resilience amid rising dollar use.
Germany’s central bank has reinforced support for Euro Stablecoins as European authorities assess rising dollar-linked dominance. The Deutsche Bundesbank signaled stronger backing for Euro Stablecoins to protect monetary control. Meanwhile, the European Central Bank warned that dollar-pegged tokens could weaken euro area policy transmission.
Bundesbank Promotes Euro Stablecoins to Strengthen Sovereignty
The Deutsche Bundesbank outlined plans to advance digital euro initiatives alongside regulated Euro Stablecoins. It stressed that Euro Stablecoins can improve cross-border efficiency and reduce reliance on foreign payment systems. Therefore, officials framed these tools as part of a broader sovereignty strategy.
Bundesbank President Joachim Nagel reiterated support for a retail and wholesale central bank digital currency. He said a wholesale CBDC would enable programmable payments using central bank money. Moreover, he linked Euro Stablecoins with improved competitiveness in financial technology and settlement services.
Nagel also pointed to exploratory work within the Eurosystem on wholesale CBDC structures. He explained that financial institutions could process automated transactions securely under this model. At the same time, he argued that Euro Stablecoins offer cost-effective solutions for firms and households.
ECB Flags Dollar-Pegged Dominance as Policy Risk
The European Central Bank raised concerns over the expanding market share of dollar-backed stablecoins. Officials stated that heavy reliance on foreign currency tokens may impair euro area monetary transmission. Consequently, they emphasized the strategic importance of Euro Stablecoins within regulated frameworks.
ECB representatives warned that digital dollarization could erode financial autonomy across member states. They argued that a domestic digital euro would reinforce resilience in payment systems. In addition, they maintained that Euro Stablecoins should align with broader monetary architecture.
German Finance Minister Lars Klingbeil urged faster European coordination on financial integration. He said the European Union must move beyond national priorities to strengthen sovereignty. Furthermore, he called the moment decisive for advancing shared financial infrastructure.
Market Outlook Signals Rapid Stablecoin Expansion
S&P Global Ratings projected strong expansion for euro-pegged digital assets over the next decade. It estimated that the euro stablecoin market could reach €1.1 trillion by 2030 under favorable conditions. However, its baseline forecast placed the figure near €570 billion.
The agency noted that euro-denominated tokens represented €650 million at the end of last year. It added that growth could account for over four percent of eurozone overnight bank deposits. Meanwhile, U.S. dollar-pegged stablecoins reached about $310 billion in total valuation by late 2025.
In the United States, lawmakers advanced stablecoin regulation after President Donald Trump signed the GENIUS Act in July 2025. However, disagreements over market structure rules have slowed further progress. Against this backdrop, European authorities continue promoting Euro Stablecoins as a pillar of monetary sovereignty.
