European banks collaborate to launch a euro-based stablecoin

No less than nine leading European banks have teamed up to issue a euro-pegged stablecoin in a space dominated by U.S. dollar-pegged digital currencies.

Participants say their project aims to provide a European alternative and boost the Old Continent’s autonomy in payments, a matter of strategic importance for Brussels and Frankfurt.

European banks set out to offer a stablecoin

Nine banking institutions, including some of Europe’s largest – ING, Banca Sella, KBC, Danske Bank, DekaBank, UniCredit, SEB, CaixaBank and Raiffeisen Bank – have joined forces to create a new stablecoin.

The digital currency will be blockchain-based and denominated in euro, the Eurozone’s common fiat, one of them highlighted in a press release on Thursday, elaborating:

“This digital payment instrument, leveraging blockchain technology, aims to become a trusted European payment standard in the digital ecosystem.”

The bank-issued cryptocurrency will be compliant with the European Union’s new Markets in Crypto Assets (MiCA) regulation, Danske Bank emphasized in the announcement.

The stablecoin will provide near-instant, low-cost payments and settlements, including round-the-clock access to cross-border and programmable payments, Denmark’s largest bank detailed.

It will help improve supply chain management and digital asset settlements, taking into account the specifics of cryptocurrencies and securities, added the Danish giant, which is a major retail bank across Northern Europe.

Euro stablecoin to be issued next year

The consortium behind the European stablecoin project has registered a new company in the Netherlands, which will apply for a license as an e-money institution under the supervision of the country’s monetary authority.

The founding members indicated they are open to accepting other banks in the consortium, which is yet to appoint a CEO of the Dutch-based entity, pending regulatory approval.

The stablecoin is expected to be first issued in the second half of 2026, Danske Bank unveiled. It also stressed:

“The initiative will provide a real European alternative to the US-dominated stablecoin market, contributing to Europe’s strategic autonomy in payments.”

The euro-linked digital coin will allow commercial banks to provide value added services, the bank said, including custody and wallet services.

“Digital assets have the power to transform the financial landscape — not just by introducing new forms of money, but by unlocking meaningful efficiencies and savings for both the financial sector and customers,” its head of transaction banking, Flaminia Lucia Franca, elaborated.

“Evolution must be driven by collaboration and shared standards across the industry,” she added, noting the project is addressing inefficiencies, frictions and costs with the help of new technology.

The wide spread of U.S. dollar-based stablecoins is worrying policy makers in the EU, as the growing popularity of these private cryptocurrencies is seen as a threat to Europe’s financial security, particularly in terms of sovereignty over payments.

While the United States has no current plans to create a digital dollar, the authorities in Brussels and Frankfurt took the path of developing a digital euro, partly with these concerns in mind.

U.S. President Donald Trump’s decision to ban central bank digital currencies (CBDCs), soon after returning to the White House, has been viewed as a support for dollar-backed stablecoins, which can grow the Greenback’s dominance.

Digital euro launch may take a while

In recent comments, Bundesbank President Joachim Nagel urged for a stronger international role of the single European currency, noting its digital version will be “a sensible response to stablecoins,” as reported by Cryptopolitan.

“The digital euro would make Europe more independent in terms of critical infrastructure,” reasoned Nagel, who is a member of the European Central Bank (ECB)’s Governing Council.

However, it’s likely to take a few more years until Europe can get its CBDC system fully up and running. On Tuesday, ECB’s board member Piero Cipollone indicated the Eurozone’s monetary authority is eyeing 2029 as a realistic timeline for its rollout.

Earlier this year, ECB President Christine Lagarde said the bank will be technically ready by October 2025. But the launch date will depend on how fast the European Parliament, Council, and Commission approve the necessary legislation.

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