EU banks to create crypto euro in new joint stablecoin venture

Ten major European banks partnered on Tuesday (2 December) to create a new euro-backed stablecoin through a joint venture called Qivalis, hoping to build a European alternative to US dollar-based stablecoins.

Aiming to launch in the second half of 2026, the Amsterdam-based stablecoin company, backed by BNP Paribas, ING, Danske Bank, and seven other banks, will be supervised by the Dutch central bank and comply with the recently enacted EU Markets in Crypto-assets Regulation. 

“A native euro stablecoin isn't just about convenience; it's about monetary autonomy in the digital age,” said newly-appointed CEO Jan-Oliver Sell.

A stablecoin is a type of cryptocurrency that is backed by tangible financial assets, such as a government currency or a commodity, and, in theory, maintains value and is less volatile than an unbacked coin. 

The euro initiatives come as the United States currently holds dominance in the crypto arena, launching its own government-backed stablecoin, USD1, which will have a one-to-one value with the dollar.

Some 70 percent of current stablecoins are denominated in the US dollar, with those coins holding 99 percent of the market value, according to research by the Bank for International Settlements, a consortium of central banks.

And there has been interest in Europe in the technology, with European Council ministers discussing the pros and cons of stablecoins at a ministerial meeting in October. 

Then Irish finance minister Paschal Donohoe (who left in November for a job at the World Bank) said after that meeting: "We have seen growing interest from established financial institutions and corporate actors in stablecoins and we're aware of the growth of this sector.”

“We know that it's very likely that these digital assets will play an increasing role in the operation of financial markets,” he added.

Despite the interest and initiatives of European financial institutions, research by the European Parliament from June has a different outlook on the currency.

Experts do not see stablecoins upending the current financial environment anytime soon, and a euro-backed stablecoin might even decrease trust in the euro itself, as crypto is seen as volatile and is a favoured currency for criminals.

They argue that the digital euro, which the European Central Bank is preparing, would be a safer alternative to a stablecoin, but even there, the European Parliament is sceptical of the digital currency. 

“As it now stands, the digital euro might prove to be underwhelming to European consumers," wrote the parliamentary researchers, although they cited privacy, price, and added value compared to other private payment solutions as possible pull factors.

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