Euro Banks Unite to Launch a Stablecoin Challenge

Nine major European banks, led by ING, are joining forces to introduce a euro-denominated stablecoin. This collaborative move is a direct response to the near-total dominance of US dollar-led digital tokens in the stablecoin market, reports Finextra. The consortium includes ING, CaixaBank, Banca Sella, KBC, Danske Bank, DekaBank, UniCredit, SEB, and Raiffeisen Bank International.

This new digital payment instrument, built on blockchain technology, is designed to comply with the European Union's comprehensive MiCAR (Regulation on Cryptocurrency Markets) framework. Its core promise is to facilitate near-instant, low-cost cross-border payments and settlements. Individual member banks will also be able to offer complementary services, such as stablecoin wallets and custody.

As Mariona Vicens of CaixaBank notes, this initiative provides a genuine "European alternative" to a market where dollar-based stablecoins account for a staggering 99% of total market capitalization. Currently, euro-denominated stablecoins are marginal, with a market cap below €350 million. Vicens emphasizes that this marks a crucial step in building a robust European digital payments ecosystem, which will ultimately strengthen Europe's "strategic autonomy" in finance.

Floris Lugt, Digital Assets Lead at ING, highlights the benefits: "Digital payments are key for new euro-denominated payments and financial market infrastructure. They offer significant efficiency and transparency, thanks to blockchain technology's programmability features and 24/7 instant cross-currency settlement." He stressed that an "industry-wide approach" and shared standards are essential for success. The consortium has established a new company in the Netherlands, aiming to secure a license as an e-money institution from the Dutch Central Bank. The stablecoin is expected to be first issued in the second half of 2026.

This development is likely to be warmly received by European policymakers. Concerns have been mounting over the influence of US dollar stablecoins. Jürgen Schaaf, an economist and advisor to the European Central Bank's Market Infrastructure and Payments division, previously warned that support for properly regulated euro-denominated stablecoins is necessary to "ward off the threat" posed by dollar-backed tokens and "reinforce the international role of the euro." The consortium remains open to additional banks joining in the future.