Bundesbank President Wants Euro-Pegged Stablecoins to Prevent Dollarization

In brief

• The ECB’s Joachim Nagel has said that euro-denominated stablecoins could provide fast and cheap remittances, while also countering any risk of dollarization from USD-pegged stablecoins.
• The ECB is aiming to introduce a digital euro by 2029, with work already underway on a wholesale central bank digital currency.
• Some commentators suggest that, given the downsides of stablecoins, tokenized deposits may be a better way of preventing dollarization.