Joachim Nagel, President of the Deutsche Bundesbank and a member of the European Central Bank’s Governing Council, indicated that euro-denominated stablecoins could play a role in facilitating cheaper international transfers, complementing the ECB’s ongoing development of a digital euro. Nagel made the comments at the Euro50 Group meeting in London on February 12, 2026, outlining potential challenges and opportunities for European monetary policy in a shifting geopolitical landscape.
Nagel’s remarks come as concerns grow regarding Europe’s economic independence, particularly in the realm of digital payments. He previously stated in a September 22, 2025, speech that Europe relies on non-European providers for payments and many digital services. The Bundesbank president suggested that stablecoins, if properly regulated, could offer a more efficient alternative for cross-border transactions. He also cautioned against the risk of “dollarisation” through the widespread adoption of stablecoins, potentially weakening European sovereignty, according to a report from Central Banking on February 13, 2026.
The ECB has been actively pursuing its own digital euro project, aiming to provide a central bank digital currency (CBDC) for the Eurozone. Nagel’s comments suggest a willingness to consider stablecoins as a supplementary tool, rather than a direct competitor, to the digital euro. In September 2025, Nagel stated that the digital euro would produce Europe more competitive, according to a Bloomberg report.
The discussion around stablecoins and digital currencies occurs against a backdrop of heightened geopolitical risk. According to a measure tracked by economists at the Federal Reserve, geopolitical risk levels are currently comparable to those seen in 2022, the year Russia launched its full-scale invasion of Ukraine. This elevated risk environment is contributing to increased volatility in inflation, a key concern for the ECB as it navigates monetary policy.
Nagel emphasized the importance of quantitative tightening (QT) as a crucial tool for the ECB to address future crises. He believes that continuing to reduce the ECB’s balance sheet will provide the central bank with greater flexibility to respond to economic shocks. The ECB updated its monetary policy strategy last year to better equip itself to handle such challenges.
The Bundesbank president’s speech also touched on the safe-haven status of the U.S. Dollar, noting that it did not benefit from its traditional role following U.S. Tariff announcements in April 2025. This observation underscores the need for Europe to recognize changing dynamics in the global financial system and strengthen its own economic position.
The ECB has not yet announced a firm launch date for the digital euro and the regulatory framework for stablecoins remains under development. The European Central Bank commits to distributed ledger technology, according to a BIS review from September 24, 2025.
