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The Digital Euro and Why Stable Coins Matter — Founder Interview

Updated: 4 days ago

This blog post first appeared first on old medium publication (https://medium.com/startuprad-io), and was moved to this blog with the relaunch of our website in summer 2024.

What Is This About?

The digital euro is coming, and stablecoins are already here. This episode explains why central bank digital currencies matter for Europe's financial future, how they differ from private stablecoins, and what opportunities they create for fintech innovation in payments, lending, and programmable money.

Executive Summary

  • This blog post first appeared first on old medium publication (https://medium.

  • The best way to identify investors and cooperation partners for early-stage startups.

  • Central banks take inspiration from cryptocurrencies and are actively thinking about introducing their own cryptos, called central bank digital currency (CBDC).

  • This interview was conducted by Jörn “Joe” Menninger, startup scout, founder, and host of Startuprad.

  • Here is our publication calendar: https://calendar.



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The Digital Euro and Why Stable Coins Matter — Founder Interview Startuprad.io brings you independent coverage of the key developments shaping the startup and venture capital landscape across Germany, Austria, and Switzerland.

This blog post first appeared first on old medium publication (https://medium.com/startuprad-io), and was moved to this blog with the relaunch of our website in summer 2024.


Nobody knows what a digital euro will look like. ECB is in the process of exploring the possibility.Philipp Sandner, Blockchain Expert

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China is with its digital Yuan ahead of Europe or the US. The ECB is investigating the possibility, with the aim of having a digital Euro 2025. We will see China launching the digital Yuan this year. That is almost 5 years ahead.Philipp Sandner, Blockchain Expert

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CBDC is a variant how the Euro will run on a modern infrastructure.Philipp Sandner, Blockchain Expert

The Expert

The situation of the Federal Reserve in developing a digital central bank Dollar is like the ECB. Both are early in exploring the topic.Philipp Sandner, Blockchain Expert

The Digital Euro

Central banks take inspiration from cryptocurrencies and are actively thinking about introducing their own cryptos, called central bank digital currency (CBDC). There are many podcasts out there talking about CBDC, especially US$, but Startuprad.io is headquartered in the city of the Euro, Frankfurt. So, we thought we shed some light on the perspective from Europe. The European Central Bank and the Federal Reserve are both in the first steps of exploring the possibilities and implications of CBDCs for the Euro and the US Dollar. But there is already a growing market in US$ stable coins, where stable coins in Euro have to stomach losses, due to the negative interest rates in the European Monetary Union (EMU). Tune in to learn more…

The difference in the US is that there is already a working alternative, the US$ stable coins.Philipp Sandner, Blockchain Expert

The Video Interview is set to go live on Tuesday, March 8th, 2022, at 04.00 CET



The Audio Interview Podcast

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DEFI is dominated by US$ since many people active in crypto calculate their net worth in US$.Philipp Sandner, Blockchain Expert

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The Interviewer

This interview was conducted by Jörn “Joe” Menninger, startup scout, founder, and host of Startuprad.io. Reach out to him:LinkedInTwitterEmail


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What Is the Digital Euro and Why Do Stablecoins Matter?

Blockchain expert Philipp Sandner from the Frankfurt School of Finance explains that nobody yet knows what the digital euro will look like — the ECB is still exploring possibilities. Meanwhile, China is ahead with its digital Yuan, and in the US, dollar-denominated stablecoins already serve as a working alternative to a CBDC. Sandner argues that CBDC is a variant of how the euro will run on modern infrastructure, and that DeFi is currently dominated by USD because crypto participants calculate their net worth in dollars.

Introduction

In this expert interview, Startuprad.io speaks with Philipp Sandner, one of Germany's leading blockchain experts and professor at the Frankfurt School of Finance & Management. Sandner provides a detailed analysis of the digital euro initiative and explains why stablecoins matter in the broader context of central bank digital currencies. The discussion covers the ECB's exploratory process, China's lead with the digital Yuan, the US advantage of already having functioning USD stablecoins, and the DeFi ecosystem's dollar denomination. Sandner also links to the Frankfurt School's blockchain master program for those wanting to deepen their knowledge.

Executive Summary

The digital euro remains undefined as the ECB explores its options, while China has moved ahead with the digital Yuan and the US benefits from existing USD stablecoins as a working CBDC alternative. Blockchain expert Philipp Sandner from the Frankfurt School of Finance provides a nuanced comparison of global CBDC approaches. He notes that the Federal Reserve is at a similar early stage as the ECB, but the US already has functioning stablecoins. In the DeFi space, USD dominates because crypto participants calculate net worth in dollars, creating a structural advantage for dollar-denominated stablecoins. Sandner frames CBDC as a way for the euro to run on modern digital infrastructure.

Key Takeaways

  • Nobody knows what the digital euro will look like — the ECB is in the process of exploring the possibility, according to Philipp Sandner.

  • China is ahead of both Europe and the US with its digital Yuan CBDC implementation.

  • The US has a unique advantage: functioning USD stablecoins already serve as a working alternative to a CBDC.

  • Sandner describes CBDC as a variant of how the euro will run on modern infrastructure, framing it as an evolution rather than revolution.

  • DeFi is dominated by USD because many crypto participants calculate their net worth in dollars, giving USD stablecoins structural dominance.

Atomic Answer

Entities Referenced in This Episode

People

  • Philipp Sandner — Blockchain expert, professor at Frankfurt School of Finance & Management

  • Jörn "Joe" Menninger — Startuprad.io host and interviewer

Institutions

  • Frankfurt School of Finance & Management — Offers blockchain master program, Sandner's institution

  • European Central Bank (ECB) — Exploring the digital euro

  • Federal Reserve — At early stage of CBDC development, similar to ECB

Topics

  • Digital euro, stablecoins, CBDC, digital Yuan, DeFi USD dominance, blockchain education, central bank digital currency, euro infrastructure

Relationship Map

  • Philipp Sandner → blockchain expert at → Frankfurt School of Finance & Management

  • ECB → exploring → digital euro (undefined form)

  • China → ahead with → digital Yuan (CBDC)

  • US → has working alternative → USD stablecoins

  • DeFi ecosystem → dominated by → USD-denominated stablecoins

  • Frankfurt School → offers → blockchain master program

Quote Highlights

  • Nobody knows what the digital euro will look like — the ECB is in the process of exploring the possibility.

  • China is ahead of both Europe and the US with its digital Yuan CBDC implementation.

  • Functioning USD stablecoins already serve as a working alternative to a central bank digital currency.

  • DeFi is dominated by USD because many crypto participants calculate their net worth in dollars, giving USD stablecoins structural dominance.

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Frequently Asked Questions

What is the digital euro?

The digital euro is a potential central bank digital currency being explored by the European Central Bank. According to blockchain expert Philipp Sandner, nobody yet knows what it will look like — the ECB is still in the exploration phase. It would represent a digital form of the euro issued directly by the central bank.

Why do stablecoins matter for the digital euro?

Stablecoins matter because they represent a privately issued alternative to CBDCs. In the US, dollar-denominated stablecoins already function as a working digital currency, giving the US a head start. The euro zone lacks equivalent euro stablecoins at similar scale, making the digital euro initiative more urgent.

Who is Philipp Sandner?

Philipp Sandner is one of Germany's leading blockchain experts and a professor at the Frankfurt School of Finance & Management. He heads the Frankfurt School Blockchain Center and is frequently cited on topics related to digital currencies, CBDC, and blockchain technology in Europe.

How does DeFi relate to stablecoins?

According to Sandner, the DeFi (decentralized finance) ecosystem is dominated by USD because many crypto participants calculate their net worth in dollars. This creates structural dominance for USD-denominated stablecoins and poses a challenge for euro-based alternatives.

About the Host

Joern "Joe" Menninger is the host of the Startuprad.io podcast and covers founders, investors, and policy developments across the DACH startup ecosystem. Through more than 1,300 interviews and nearly a decade of reporting, he documents the evolution of the European startup landscape. Follow Joern on LinkedIn.

Support Startuprad.io

Startuprad.io partners with selected companies that want to shape the conversation around fintech, digital assets, and financial infrastructure in Europe. If that is relevant for your team, you can learn more here: [PARTNER_LINK]

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