Amid stablecoin proliferation, worries grow over 'dollar dominance'… Bundesbank chief says "euro stablecoin needed"

Uk Jin

Summary

It reported that concerns are being raised in the cryptoasset market over a further expansion of dollar dominance.
Joachim Nagel, President of the Deutsche Bundesbank, said euro-denominated stablecoins could strengthen Europe’s independence in the payments system.
It reported that Nagel warned that if the market share of dollar-denominated stablecoins holds, Europe’s monetary policy and monetary sovereignty could be weakened.

Concerns are being raised in the cryptoasset (cryptocurrency) market that the dollar’s dominance could further strengthen. Germany, one of the European Union’s (EU) major member states, has signaled its intention to expand euro-denominated stablecoins (cryptoassets pegged in value to fiat currencies).

According to Cointelegraph on the 17th (Korea time), Joachim Nagel, President of the Deutsche Bundesbank, said in a New Year’s address hosted by the American Chamber of Commerce in Germany in Frankfurt that “euro-denominated stablecoins can enhance Europe’s independence in terms of payment systems and solutions.”

He explained that “a wholesale central bank digital currency (CBDC) would enable financial institutions to carry out programmable payments based on central bank money,” adding that “euro-denominated stablecoins could be used by individuals and companies to conduct cross-border payments at low cost.”

Nagel had previously warned at a Euro50 Group meeting that if the market share of dollar-denominated stablecoins remains at current levels, Europe’s monetary policy and monetary sovereignty could be weakened.