Ten major European banks have formed a consortium to launch a euro-backed stablecoin by mid-2026, in a decisive push to counter U.S. dollar dominance in the $300+ billion global stablecoin market.
BNP Paribas joined nine European lenders, including ING, UniCredit, CaixaBank, Danske Bank, SEB, Raiffeisen Bank International, Banca Sella, KBC, and DekaBank, to develop a MiCA-compliant digital payment instrument through a newly established entity called Qivalis, based in Amsterdam.
The initiative comes as European regulators grow increasingly concerned about the bloc’s overwhelming reliance on dollar-denominated tokens, which account for 99.58% of the market, while euro-pegged alternatives remain marginal, with just $649 million in circulation.
Source: DefiLlamaBanking Consortium Establishes Leadership Structure Under Dutch Oversight
Qivalis has assembled an experienced leadership team to guide the project from regulatory approval through commercial launch.
Jan-Oliver Sell, former Managing Director at Coinbase Germany who secured the first crypto custody license from BaFin, will serve as CEO alongside CFO Floris Lugt, who previously led Digital Assets Wholesale Banking at ING.
Sir Howard Davies, former Chairman of the Financial Services Authority and RBS, will chair the Supervisory Board, bringing decades of regulatory and banking expertise to the initiative. All appointments remain subject to regulatory approval.
The consortium already applied for an electronic money institution license with the Dutch Central Bank.
“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, emphasizing that the initiative addresses monetary autonomy concerns in the digital age.
The consortium remains open to additional banks joining the initiative, aiming to drive broader industry participation in the payment innovation.
European Experts Warn of Dollar Stablecoin Systemic Risks
The banking initiative follows mounting warnings from European financial authorities about the dangers posed by dollar-backed tokens.
Dutch central bank governor Olaf Sleijpen cautioned that rapid stablecoin growth could force the ECB to reconsider monetary policy if instability triggers mass sell-offs of underlying assets, primarily U.S. Treasuries.
“If stablecoins in the US increase at the same pace as they have been increasing, they will become systemically relevant at a certain point,” he told the Financial Times, acknowledging uncertainty over whether the central bank would respond with rate cuts or increases.
The European Systemic Risk Board, chaired by ECB President Christine Lagarde, escalated concerns in October by identifying vulnerabilities in multi-issuer stablecoin models where EU-regulated entities hold reserves locally while non-EU partners manage identical tokens backed abroad.
The ESRB endorsed a recommendation to ban such structures, warning that stress-driven redemptions could overwhelm European reserves and expose the bloc to offshore liabilities.
European Stability Mechanism Managing Director Pierre Gramegna also reinforced the urgency during an October hearing, declaring that “Europe should not be dependent on U.S. dollar-denominated stablecoins, which are currently dominating markets.“
Lagarde compared the risks to past banking crises, in which liquidity mismatches and inadequate reserves destabilized institutions across borders.
Stablecoin Aims to Enhance European Payment Infrastructure
The consortium’s stablecoin will enable 24/7 access to efficient cross-border payments, programmable transactions, and improvements in supply chain management and digital asset settlements.
“We believe this development requires an industry-wide approach, and it’s imperative that banks adopt the same standards,” said Lugt.
The initiative aims to provide near-instant, low-cost payment and settlement capabilities while maintaining compliance with MiCA regulations.
Beyond the banking consortium’s efforts, the ECB continues advancing its digital euro project, with Executive Board member Piero Cipollone describing recent consensus on customer holding limits as a major breakthrough toward a potential 2029 launch.
“The middle of 2029 could be a fair assessment,” he said.
The European Parliament is also expected to adopt a legislative framework position by May 2026, while member states aim to reach a general agreement by year-end.
Looking ahead, Europe is pursuing a dual approach of private-sector stablecoin development and public digital currency initiatives to modernize payment infrastructure and reduce its reliance on U.S.-dominated systems and private payment giants such as Visa and PayPal.
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