EU Banks Advocate for Euro-Pegged Stablecoin by 2027

A group of ten European banks, including BNP Paribas, plans to introduce a euro-pegged stablecoin by the second half of 2026. This initiative comes under the oversight of the Dutch Central Bank, with the banks forming an entity named Qivalis based in Amsterdam.

Qivalis aims to launch a stablecoin that complies with the European Union's Markets in Crypto-Assets, or MiCA, framework, pending regulatory approval. Jan-Oliver Sell, the CEO of Qivalis, stated that a native euro stablecoin represents not only convenience but also the importance of monetary autonomy in the digital age.

The initiative is expected to provide European companies and consumers with new opportunities to engage in on-chain payments and digital asset markets using their local currency. This move toward a euro-pegged stablecoin coincides with developments in the United States, where regulators are preparing to implement a framework for payment stablecoins through the GENIUS Act, signed into law by President Donald Trump in July.

In contrast, the Dutch Central Bank Governor, Olaf Sleijpen, has expressed concerns regarding the potential risks that a growing stablecoin market may pose to monetary policy. Despite these concerns, the European Central Bank, or ECB, indicated in a November report that the risks associated with stablecoins remain limited; however, they justify close monitoring due to rapid market growth.

As of July, euro-denominated stablecoins had a market capitalization of less than 350 million euros, approximately $407 million, representing less than 1% of the global stablecoin market. Meanwhile, Tether, a major stablecoin issuer, has recently withdrawn from the euro stablecoin market, ceasing redemptions for its euro-pegged coin, EURt, citing the risks associated with the EU's MiCA regulations.

Tether's CEO, Paolo Ardoino, acknowledged that these regulations pose challenges for stablecoins. This push for a euro-pegged stablecoin reflects the evolving landscape of financial transactions in Europe, particularly as the banking sector adapts to the increasing relevance of digital currencies.