European banks to launch euro stablecoin to counter US lead?

• European banks including ING and UniCredit plan a euro stablecoin through a new Amsterdam-based firm.
• The token is expected to launch in the second half of 2026 and aims to support low-cost digital payments and settlements.
• The move responds to the growing dominance of U.S. dollar-backed stablecoins and seeks to strengthen Europe’s digital currency role.

European banks are launching a joint effort to issue a euro-denominated stablecoin through a new Amsterdam-based company. The group includes nine major institutions, such as ING, UniCredit, and Danske Bank. Their goal is to challenge the dominance of U.S. dollar-backed tokens by offering a European alternative for fast, low-cost digital payments. With global stablecoin circulation nearing $300 billion, euro-backed tokens remain marginal at around €620 million. This move comes amid concerns that Europe could fall behind as other regions adopt tokenized money. The project is expected to go live in the second half of 2026 and reflects growing pressure on the EU to secure its place in digital finance.

European banks prepare an Amsterdam hub and a 2026 launch window

A consortium of nine lenders—ING, UniCredit, Banca Sella, KBC, DekaBank, Danske Bank, SEB, CaixaBank, and Raiffeisen Bank International—has set up a new Amsterdam-based company to issue a euro stablecoin. The group targets the second half of 2026 for first issuance, positioning the token for retail payments, cross-border remittances, and rapid settlement in capital markets. The plan includes appointing a chief executive soon and leaving the door open for other institutions to join, which signals a design built for scale as well as alignment with Europe’s regulatory framework. The initiative describes a “quick, low-cost” instrument for day-to-day transactions and back-office settlement flows, bridging on-chain activity with bank-grade compliance. By rooting the project in the Netherlands, the consortium gains proximity to a mature supervisory regime and to eurozone market infrastructure, which should help with licensing, reserve oversight, and wallet and custody services. The vision is straightforward: put a safe, euro-referenced token in customers’ hands, keep reserves transparent, and offer programmable features that work cleanly with existing payment systems.

Market context and data: stablecoin issuance, euro share, and U.S. lead

The addressable market is large and skewed. Global stablecoin float sits near $300 billion, yet euro-denominated tokens account for only about €620 million, according to recent European reporting that highlights a persistent gap between dollar and euro supply. That imbalance shows up in trading venues, in merchant acceptance, and in settlement tooling where dollar-pegged tokens dominate liquidity. In practice, users reach for dollar tokens when they need fast, always-on value transfer; the euro share remains a niche despite the size of the common currency area. Non-bank issuers such as Tether and Circle still set the pace on market coverage and integrations, while bank issuers in Europe have moved more cautiously, focusing on compliance and reserve clarity. A successful launch from this new vehicle would increase the euro’s on-chain presence and provide a bank-supervised alternative for corporates and fintechs that operate within European legal perimeter. The scale target is not spelled out, but the gap with dollar tokens suggests room to grow if fees stay modest and conversion remains seamless.

European banks, ECB scepticism, and the digital euro debate

Policy remains central to adoption, and European banks must navigate it carefully. In June, ECB President Christine Lagarde warned lawmakers that privately issued stablecoins pose risks to monetary policy and financial stability because deposits might migrate out of banks and because pegs do not always hold in stress. She urged legislators to advance a legal base for a central bank digital euro as a safer public option for digital payments inside the bloc. Commercial lenders have voiced concerns that a retail digital euro could drain funding, which explains why many prefer bank-issued tokens that preserve deposit relationships while meeting customer demand for instant, programmable money. European banks behind the new stablecoin argue that a regulated, euro-referenced instrument can sit within existing prudential rules, mitigate leakage to offshore tokens, and align with MiCA disclosure and reserve standards. The project’s timing reflects a landscape in which private tokens, a potential digital euro, and card and account-to-account rails will likely coexist, each serving distinct use cases across retail, wholesale, and capital markets.

Participants, existing euro tokens, and what comes next

This is not Europe’s first euro stablecoin, but it could be the broadest bank-led one. Société Générale’s digital asset arm, SG-FORGE, launched EURCV in 2023, and later added a dollar token; reported circulation sits near €56.2 million for EURCV and about $32.25 million for the dollar token, which signals limited but real institutional uptake. A wider syndicate of lenders with a common operating company may help expand merchant and treasury use, integrate with trading venues, and provide a clearer pathway for audit and reserve reporting familiar to bank supervisors. European banks also move against a shifting global backdrop. A Deutsche Bank analysis recently described a “monetary dilemma” for emerging markets as dollar-based stablecoins begin to substitute for local deposits and cash, a trend that places pressure on jurisdictions without strong digital currency options. U.S. banks have explored issuing their own tokens, and Washington has advanced a federal framework for payment stablecoins, which could further lock in dollar primacy on public chains and permissioned networks. Europe risks being a price taker in this market if bank-backed euro liquidity does not scale, so the Amsterdam venture aims to change that with a regulated alternative that keeps value inside the European legal perimeter, links into instant payment schemes, and lets corporates run programmable workflows without routing everything through dollar rails.

Conclusion

European banks have taken a step toward greater independence in digital finance by forming a new company to issue a euro-backed stablecoin. With the U.S. still dominating stablecoin markets through dollar-linked tokens, this initiative aims to bring Europe into a more competitive position. The group of nine banks intends to offer a fast, low-cost solution rooted in European regulation, with an expected launch in late 2026. The European Central Bank remains cautious, warning about risks to monetary control, while banks argue for a model that supports private innovation under oversight. As demand for digital payment solutions grows, Europe faces mounting pressure to act. The upcoming euro stablecoin may shape how digital money is used and governed across the continent.

Disclaimer

The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from CryptoNewsBytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.

Featured image created by AI