Nine European bank have joined forces to launch a euro-deonomintated stablecoin designed to challenge the dominance of dollar-led tokens.
Banks backing the ING-led initiative include CaixaBank, Banca Sella, KBC, Danske Bank, DekaBank, UniCredit, SEB and Raiffeisen Bank International.
Developed in accordance with the European Union's Regulation on Cryptocurrency Markets (MiCAR), the new digital payment instrument, leveraging blockchain technology, will provide near-instant, low-cost cross-border payments and settlements. It is envisaged that individual banks will be able to provide value added services, such as a stablecoin wallet and custody.
Mariona Vicens, head of digital transformation and advanced analytics at CaixaBank says that the initiative will provide a real European alternative to the US-dominated stablecoin market.
US dollar-based stablecoins currently account for some 99% of total stablecoin market capitalisation. In contrast, euro-denominated stablecoins remain marginal - with market capitalisation of less than €350 million.
Vicens points out that "technology is profoundly transforming the financial infrastructure and, in particular, standards on how to make payments and transactions. We believe that the initiative can mark an important step in building a robust and reliable European digital payments ecosystem that strengthens Europe's strategic autonomy in the field of payments".
The stablecoin is expected to be first issued in the second half of 2026. The consortium has formed a new company in the Netherlands, aiming to be licensed and supervised by the Dutch Central Bank as an e-money institution.
The consortium is open to additional banks joining, and a CEO is expected to be appointed in the near future, subject to regulatory approval.
Floris Lugt, digital assets lead at ING, comments: "Digital payments are key for new euro-denominated payments and financial market infrastructure. They offer significant efficiency and transparency, thanks to blockchain technology's programmability features and 24/7 instant cross-currency settlement. We believe this development requires an industry-wide approach, and it's imperative that banks adopt the same standards."
The initiative will likely be welcomed by European policymakers, who have grown increasingly concerned over the encroachment of US dollar stablecoins in the bloc.
In July, Jürgen Schaaf, an economist and advisor to the European Central Bank's Market Infrastructure and Payments division, warned that more support should be provided for properly regulated euro-denominated stablecoins to ward off the threat posed by US dollar-backed tokens.
"While the neutrality of public institutions is often preferred, a strategic blind spot in this space could prove costly," he says. "Euro-based stablecoins, if designed to high standards and effective risk mitigation, could serve legitimate market needs. They could also reinforce the international role of the euro."