European Banks Plan Euro-Denominated Stablecoin
A group of nine European banks, including ING and UniCredit, announced on Thursday their intention to create a new company aimed at launching euro-denominated stablecoins.
According to a representative from Dekabank, the company will be headquartered in Amsterdam. They expect the stablecoin to be ready by next year, as indicated in the consortium’s statement.
Stablecoins are digital currencies designed to hold a steady value, backed by traditional currencies like the euro and US dollar. These tokens are utilized for digital payments and cross-border transactions, especially in emerging markets, where they can provide stability amidst the fluctuations of cryptocurrencies.
While the new token is expected to facilitate quick and low-cost payments, the European Central Bank (ECB) expresses skepticism about stablecoins. In June, ECB President Christine Lagarde warned that the introduction of digital currencies by European policymakers could pose risks to monetary policy and financial stability. She called for legislation to support the digital euro, but some banks have opposed its rollout.
Joining the initiative alongside ING and UniCredit are banks like Banca Sella, KBC, Danske Bank, SEB, Caixabank, and Raiffeisen Bank International. The consortium indicated that more banks might participate, and a CEO for the new company will be appointed shortly.
One spokesperson mentioned, “We are addressing the need for trustworthy, regulated payment solutions on the blockchain, setting the groundwork for new standards in the digital asset space that can foster growth and financial independence in Europe.”
Previously, SG-Forge, the crypto division of Société Générale, launched a euro-based stablecoin in 2023, but it has only reached 56.2 million euros (around $66 million) in distribution and hasn’t seen broad adoption. The bank also introduced a US dollar stablecoin earlier this year.
Globally, the stablecoin market is heavily tied to the US dollar, reaching nearly $300 billion, according to recent data from the Bank of Italy. By contrast, euro-denominated stablecoins currently total just $620 million, which is a small fraction compared to the overall $4 trillion global crypto asset market.
