European Banks To Launch Euro Stablecoin In Bid To Counter US Dominance

Nine major European banks are creating a Netherlands-based company to launch a euro-backed stablecoin in 2026, aiming to counter U.S. dominance in the digital token market. Reuters reports: While global stablecoin issuance stands at nearly $300 billion, euro-denominated stablecoins totalled just $620 million, according to figures released last week by the Bank of Italy, with dollar-pegged tokens overwhelmingly dominant. 'The initiative will provide a real European alternative to the U.S.-dominated stablecoin market, contributing to Europe's strategic autonomy in payments,' the banks said. They launched the effort, which they said will create a token that can be used for quick, low-cost payments and settlements, even as the European Central Bank voices scepticism over stablecoins.

ECB President Christine Lagarde in June told European policymakers that privately issued stablecoins posed risks for monetary policy and financial stability. As a safer alternative, she has urged European lawmakers to introduce legislation backing the launch of a digital version of the EU's single currency. Some commercial banks, however, have pushed back against the introduction of a digital euro, fearing that it would empty their coffers as customers transfer cash out of banks and into the safety of an ECB-guaranteed wallet. In addition to ING and UniCredit, the other banks participating in the new company include Banca Sella, KBC, DekaBank, Danske Bank, SEB, Caixabank, and Raiffeisen Bank International. They said that others could join the initiative, and a CEO for the company would be appointed soon. According to a recent report by Deutsche Bank, emerging market economies are adopting dollar-based stablecoins to replace local deposits and cash. 'This has created a global monetary dilemma: countries should adopt stablecoins or risk being left behind. Europe is under particular pressure.'

Read more of this story at Slashdot.