The Deutsche Bundesbank, the central bank of the Federal Republic of Germany, recently released a statement outlining its strong commitment to fostering substantial adoption of a digital euro in the country. In response to this announcement, analysts anticipated that the international stablecoin market would hit a record of around $500 billion by 2028.
Nonetheless, officials at the European Central Bank (ECB) raised concerns about the dominance of dollar-pegged stablecoins. According to them, this state poses a risk to the effectiveness of ECB monetary policy transmission.
Afterwards, they outlined the importance of a central bank digital currency (CBDC) for the industry, arguing that it enhances the resilience of the financial system and improves the effectiveness of monetary policy across the euro area.
This comes as German Finance Minister Lars Klingbeil stated on Monday that the European Union is at a crucial moment, urging countries to move beyond national interests and speed up efforts to boost EU influence and sovereignty.
“We want to untangle obstacles and find solutions that strengthen Europe’s sovereignty and make the continent stronger,” Klingbeil said in Brussels. “This is truly a European moment.”
Speaking ahead of a meeting with EU finance ministers, he said Germany is willing to make compromises. He added that the current pace at the European level does not match the scale of the challenges Europe is facing.
Nagel views the euro-denominated stablecoins as a game-changer for the industry
Earlier, the President of the Deutsche Bundesbank, Joachim Nagel, advocated for the creation of a CBDC linked to the euro and the use of euro-denominated stablecoins in the financial sector.
This support was observed when he delivered a speech at the American Chamber of Commerce’s New Year’s Reception in Frankfurt. At this particular moment, Nagel noted that EU officials are actively pushing to launch a retail central bank digital currency.
Their strong commitment in the sector aligns with the head of the Bundesbank’s belief that regulated, euro-denominated stablecoins can boost Europe’s competitiveness in digital payments, particularly regarding financial transaction infrastructure and fintech solutions.
To break this point down for better understanding, Nagel emphasized that, “A wholesale CBDC would enable financial institutions to carry out programmable payments using central bank money.” He also stressed the role of euro-denominated stablecoins in the finance sector, noting their capacity to facilitate cost-effective, transnational transactions for both consumer and commercial entities.
Concerning Nagel’s remarks, analysts asserted that this new perspective proves a rising determination to secure European financial sovereignty by detaching from dollar-based assets. However, they noted that the Trump administration’s pro-crypto stance raises fears of digital dollarization, which could threaten the region’s financial control.
This situation highlights the importance of local stablecoins and tokenized deposits as key tools for maintaining financial stability within the bloc.
In the meantime, influential figures in the finance sector argued that the market should watch how the Eurosystem integrates DLT-based tools without compromising central bank authority moving forward.
Moreover, they alleged that the growth of this institutional support is critical for the widespread adoption of private euro payments and their integration with traditional financial systems.
S&P Global Ratings remains positive about the stablecoin market
Earlier this month, S&P Global Ratings issued a public statement anticipating that the euro-pegged stablecoins market could skyrocket from just €650 million ($767 million) recorded towards the end of last year to €1.1 trillion ($1.3 trillion) by 2030.
At this particular moment, sources highlighted that this figure, based on a best-case scenario report on European bank stablecoin activities, represents 4.2% of eurozone banks’ overnight deposits.
Meanwhile, S&P projected that the market’s value will climb to €570 billion ($672 billion) by 2030 in its key forecast. This represents roughly 2.2% of all eurozone bank deposits. Additionally, this estimate includes €500 billion ($590 billion) in tokenized investments and roughly €100 billion ($118 billion) in tokenized payments.
The report highlighted a significant, market-wide disparity compared to the United States, where USD-pegged stablecoins reached a total valuation of $310 billion by the end of 2025.