Germany's most powerful central banker has drawn a line in the digital sand. Joachim Nagel, president of the Deutsche Bundesbank, used a speech at the American Chamber of Commerce's New Year's Reception in Frankfurt on February 16, 2026, to publicly endorse euro-denominated stablecoins and a retail central bank digital currency as tools to protect Europe's financial sovereignty from a rising tide of dollar-backed digital assets.
The timing was deliberate. Across the Atlantic, the GENIUS Act is giving US dollar stablecoins a regulatory greenlight that could cement their dominance over global crypto payments. Nagel's message to the room full of transatlantic business leaders was clear: Europe must build its own rails or risk becoming a passenger on American ones.
Nagel's Dual-Track Playbook: Stablecoins Plus a Digital Euro
Nagel outlined two complementary paths forward. The first is supporting euro-denominated stablecoins for private-sector use. "I also see merit in euro-denominated stablecoins, as they can be used for cross-border payments by individuals and firms at low cost," he said during the reception.
The second track is the digital euro, a retail CBDC that the European Central Bank has been developing since 2021. Nagel described it as "the first pan-European retail digital payment solution, based solely on European infrastructures," signaling that he views the digital euro not just as a payments tool but as a strategic infrastructure project.
On the institutional side, Nagel also backed wholesale CBDCs that would allow "financial institutions to make programmable payments in central bank money." The Eurosystem's Pontes and Appia initiatives are already laying the groundwork for tokenized settlement that stays anchored to central bank money rather than private stablecoin rails.
The Dollar Stablecoin Problem Europe Cannot Ignore
The urgency behind Nagel's remarks becomes clear when you look at the numbers. As of February 2026, the stablecoin market is dominated overwhelmingly by dollar-denominated tokens. USDT and USDC together account for well over 90% of stablecoin market capitalization. Euro-denominated stablecoins remain, in the words of Bundesbank board member Burkhard Balz, "marginal."
Balz, speaking separately at a Euro50 Group meeting, offered a blunter warning. He cautioned that continued expansion of dollar-based stablecoins in Europe could foster "re-dollarisation in digital finance," a scenario where European consumers and businesses increasingly transact in digital dollars rather than euros, even for domestic payments.
This is not a theoretical risk. Every time a European crypto card user tops up with USDC or USDT and spends at a point-of-sale terminal in euros, the transaction passes through a USD-pegged stablecoin layer. That means European spending is being intermediated by dollar infrastructure, with conversion spreads of 0.5% to 1.5% silently extracted along the way.
Nagel framed the response as part of a broader agenda: "supporting the international role of the euro. This includes making Europe more independent in terms of payment systems and solutions."
What a Liquid Euro Stablecoin Would Actually Change
For the roughly 450 million consumers in the eurozone, a liquid and widely adopted euro stablecoin could eliminate the hidden EUR-to-USD-to-EUR roundtrip that currently plagues crypto spending in Europe. When a user in Germany loads a crypto card with USDC, spends in euros at a German supermarket, and pays a 0.8% FX spread that exists only because the stablecoin is dollar-denominated, there is a real cost being paid for American infrastructure dominance.
Cards that already offer 0% foreign exchange fees would benefit from deeper euro stablecoin liquidity. Providers like Gnosis Pay, which settles directly on-chain with EURe (a euro stablecoin on Gnosis Chain), are early examples of what a euro-native payment stack looks like. If regulatory support from the Bundesbank and ECB translates into real liquidity for euro stablecoins, the competitive landscape shifts.
The digital euro adds another layer. If the ECB's retail CBDC launches by 2029, as currently targeted pending EU legislation in 2026, it would give European consumers a sovereign digital payment option that competes not just with dollar stablecoins but potentially with crypto card rails themselves.
The MiCA Factor and Why Timing Matters
Europe already has a regulatory framework for stablecoins through MiCA (Markets in Crypto-Assets Regulation), which went fully live in December 2024. MiCA's e-money token provisions require stablecoin issuers operating in the EU to hold full reserves with licensed custodians, a framework that arguably makes the EU the most stablecoin-ready jurisdiction in the world from a regulatory standpoint.
The irony is that MiCA was designed to enable exactly the kind of euro stablecoin ecosystem Nagel is now calling for. But adoption has lagged. Circle's EURC is available but lacks the trading pair depth and DeFi integration of its dollar sibling USDC. Banking Circler's EURB and SocieteGenerale's EUR CoinVertible exist in niche institutional pockets but have not achieved retail scale.
Nagel's public endorsement signals that Germany, the EU's largest economy and the Bundesbank as one of the ECB's most influential voices, is ready to push the political levers. The gap between "MiCA allows euro stablecoins" and "the Bundesbank president says Europe needs euro stablecoins" is the gap between regulatory permission and political will.
The GENIUS Act Contrast Across the Atlantic
Meanwhile, the United States is moving in the opposite direction, not toward monetary sovereignty but toward enshrining dollar stablecoin supremacy in law. The GENIUS Act, which cleared the Senate Banking Committee in early 2026, creates a federal licensing framework for payment stablecoins that is explicitly designed to extend dollar reach into digital finance globally.
As covered in SpendNode's analysis of the White House stablecoin push, the US approach treats dollar stablecoins as strategic instruments of financial influence. Bo Hines and other White House crypto advisors have openly framed stablecoins as tools to reinforce dollar hegemony.
Nagel's Frankfurt speech is the European counter-move. Where the US sees stablecoins as extending dollar power, Germany's central bank sees them as a sovereignty threat requiring a European alternative.
What This Means for Crypto Card Users in Europe
For holders of crypto cards operating in the EU and EEA, the stablecoin currency war has practical implications:
Short-term (2026-2027): Nothing changes immediately. Most European crypto cards will continue settling through USDC or USDT. But political support for euro stablecoin infrastructure means more exchanges and card issuers will add EUR stablecoin pairs and top-up options. OKX's recent EU payments license positions it to offer euro stablecoin card funding across 28 EEA countries.
Medium-term (2027-2029): If euro stablecoin liquidity deepens, European card users could see reduced conversion costs, faster settlement times, and more competitive rates from issuers who no longer need to route through dollar intermediaries.
Long-term (2029+): The digital euro, if launched, could become a direct competitor to crypto card stablecoins for everyday European spending. Whether it complements or disrupts the existing stablecoin card ecosystem depends on how the ECB structures merchant acceptance and programmability features.
FAQ
Is Germany launching its own stablecoin? No. Nagel endorsed the concept of euro-denominated stablecoins issued by the private sector, regulated under MiCA. The digital euro would be issued by the ECB, not the Bundesbank alone. Germany is pushing for the ecosystem, not issuing a token.
When would a digital euro launch? The ECB targets first issuance in 2029, contingent on EU legislation passing in 2026. The preparation phase is ongoing and involves the ECB, national central banks, and selected private-sector partners.
How does this affect my crypto card? In the short term, minimal impact. Over time, stronger euro stablecoin liquidity could reduce the hidden FX costs European cardholders currently pay when spending through dollar-pegged stablecoins. Cards already supporting EUR stablecoin top-ups would benefit first.
What is the GENIUS Act and why does it matter here? The GENIUS Act is US legislation creating a federal framework for dollar-denominated payment stablecoins. Nagel's remarks are partly a response to this Act, warning that if dollar stablecoins achieve dominant market share in Europe, it could weaken euro monetary policy.
Overview
Bundesbank president Joachim Nagel's public endorsement of euro stablecoins and a retail CBDC at the AmCham Frankfurt reception marks a significant escalation in Europe's response to dollar stablecoin dominance. With MiCA already providing the regulatory framework and the digital euro targeting 2029, Germany is signaling that the EU's largest economy views digital currency sovereignty as a strategic priority. For European crypto card users, this could eventually mean cheaper, faster, and more euro-native payment rails, but the real liquidity shift is still years away.
Recommended Reading
- White House Crypto Adviser Tells Banks to Stop Fighting Stablecoin Yield and Start Competing
- OKX Secures EU Payments Institution License in Malta, Clearing the Path for Stablecoin Card Expansion Across 28 Countries
- The EU Wants to Kill Every Crypto Bridge to Russia, and a $100 Billion Stablecoin Is the Reason Why
