European lenders are accelerating plans for a regulated euro stablecoin as scrutiny of dollar-pegged tokens intensifies across the bloc.
Ten EU banks back new Amsterdam-based stablecoin issuer
Ten major European banks have formed a consortium to launch a euro-backed stablecoin by mid-2026, in an explicit effort to counter U.S. dollar dominance in the $300+ billion global stablecoin market. Moreover, the move underscores growing political and regulatory pressure to strengthen European monetary sovereignty in digital payments.
BNP Paribas has joined nine European lenders, including ING, UniCredit, CaixaBank, Danske Bank, SEB, Raiffeisen Bank International, Banca Sella, KBC, and DekaBank. Together, they are building a MiCA-compliant digital payment instrument through a newly created Amsterdam-based entity called Qivalis.
The initiative comes as European regulators warn about the bloc’s overwhelming reliance on dollar-denominated tokens, which currently account for 99.58% of the stablecoin market. By contrast, euro-pegged alternatives remain marginal, with just $649 million in circulation, highlighting the scale of the challenge the new project aims to address.
Leadership team formed under Dutch regulatory oversight
Qivalis has assembled an experienced leadership structure to steer the project from initial licensing to commercial rollout. However, all senior appointments remain subject to formal regulatory approval, reflecting the tight supervisory environment emerging under the EU’s MiCA regime.
Jan-Oliver Sell, former Managing Director at Coinbase Germany who secured the first crypto custody license from BaFin, will serve as CEO. He will work alongside CFO Floris Lugt, who previously led Digital Assets Wholesale Banking at ING, bringing both traditional finance and crypto-native expertise into the venture.
The Supervisory Board will be chaired by Sir Howard Davies, former Chairman of the Financial Services Authority and RBS. His appointment is intended to reassure regulators and institutions that governance and risk management will mirror established banking standards. Moreover, the consortium has already applied for an electronic money institution license with the Dutch Central Bank, placing the project under direct Dutch central bank oversight from the outset.
“The launch of a euro-denominated stablecoin, backed by a consortium of European banks, represents a watershed moment for European digital commerce and financial innovation,” Sell said, arguing that the initiative directly tackles monetary autonomy concerns in the digital age. The group remains open to additional banks joining, which could further broaden the project’s reach and liquidity.
Regulators warn of systemic risks from dollar stablecoins
The banking initiative comes amid increasingly stark warnings from European authorities about the systemic risks posed by dollar-backed tokens. That said, policymakers are also trying to balance innovation with financial stability as digital assets move closer to mainstream use.
Olaf Sleijpen, governor of the Dutch central bank, cautioned that rapid stablecoin growth could eventually force the ECB to rethink its monetary policy framework. He warned that instability in large dollar-pegged tokens could trigger mass sell-offs of underlying assets, primarily U.S. Treasuries, with knock-on effects for global bond markets.
“If stablecoins in the US increase at the same pace as they have been increasing, they will become systemically relevant at a certain point,” Sleijpen told the Financial Times. However, he acknowledged that it remains unclear whether the central bank would ultimately respond with rate cuts or increases if such a stress scenario unfolded.
The European Systemic Risk Board (ESRB) has also flagged vulnerabilities in complex multi-issuer models. In these structures, EU-regulated entities hold reserves locally while non-EU partners manage identical tokens backed abroad. The ESRB endorsed a recommendation to ban such arrangements, warning that stress-driven redemptions could overwhelm European reserves and leave the bloc exposed to offshore liabilities.
Pierre Gramegna, Managing Director of the European Stability Mechanism, reinforced the urgency during an October hearing, stating that “Europe should not be dependent on U.S. dollar-denominated stablecoins, which are currently dominating markets.” Likewise, ECB President Christine Lagarde compared the risks to past banking crises, where liquidity mismatches and inadequate reserves destabilized institutions across borders.
How the new token aims to modernize European payments
The consortium’s planned token is designed to support 24/7 access to efficient cross-border payments, programmable transactions, and enhanced settlement for digital assets. Moreover, the partners highlight potential benefits for supply chain management and corporate treasury operations across the European Union.
“We believe this development requires an industry-wide approach, and it is imperative that banks adopt the same standards,” Lugt said, stressing the need for interoperability rather than fragmented platforms. The project therefore aims to deliver near-instant, low-cost payment and settlement capabilities, while remaining fully aligned with MiCA rules and broader EU financial regulations.
As part of that vision, the euro stablecoin is being framed not only as a response to U.S. stablecoin market dominance, but also as a foundational layer for future tokenized assets and on-chain financial products. However, its success will depend on trust from both regulators and institutional users.
Digital euro and public-sector innovation track in parallel
Beyond the banking consortium, the European Central Bank is pressing ahead with its own digital euro initiative, reflecting a dual-track approach that blends private and public solutions. This strategy aims to modernize Europe’s payment infrastructure while limiting dependence on foreign providers such as Visa and PayPal.
Piero Cipollone, a member of the ECB Executive Board, recently described internal consensus on customer holding limits as a major breakthrough for the digital euro design phase. “The middle of 2029 could be a fair assessment,” he said, indicating a potential launch window for a retail central bank digital currency if political and technical milestones are met.
In parallel, the European Parliament is expected to adopt its position on the legislative framework by May 2026, while EU member states are working toward a general agreement by year-end. Moreover, the European Commission has floated the idea of granting ESMA direct supervisory powers over crypto firms, potentially replacing MiCA’s national competent authority model with a more centralized oversight regime.
Looking ahead, Europe is clearly pursuing a combined strategy of private-sector stablecoin development and a public digital currency. This twin-track approach is intended to enhance resilience, reduce reliance on U.S.-dominated systems, and support the broader European digital currency initiative across capital markets and retail payments.
Outlook for Europe’s stablecoin and digital asset ecosystem
The launch of Qivalis and its planned token marks a pivotal moment for European digital finance, bringing together large banks, experienced regulators, and a clear regulatory framework under MiCA. However, competition from existing global issuers and evolving rules will test the project’s ability to gain scale.
If successful, the consortium’s mid-2026 launch target could reshape how businesses and institutions handle cross border crypto payments, settlements, and liquidity across the euro area. In parallel, the ECB’s prospective digital euro around 2029 may further transform the landscape, creating a layered architecture of public and private money that supports innovation while aiming to safeguard financial stability.
In summary, Europe’s push for a regulated bank-backed token and its digital euro project signals a strategic effort to regain monetary autonomy in digital markets, reduce systemic exposure to dollar stablecoins, and strengthen the region’s role in the global crypto and payments ecosystem.
