Nine European Banks Launch Euro Stablecoin to Rival Private Coins
Brussels is taking its time to adopt the digital euro, as private stablecoins pose a threat to central bank money. Meanwhile, banks are launching a euro stablecoin to preserve the role of European central banks and strengthen the euro's position.
Nine leading European banks, including DekaBank, UniCredit, and ING, are collaborating to develop a Euro-based stablecoin. This project, supported by a new company licensed by the Dutch central bank, aims to launch in late 2026. The goal is to preserve the central bank money role and strengthen the euro's position against the US dollar.
The Bundesbank has expressed concern that stablecoins could displace central bank money used in large-value transactions. The European Parliament's rapporteur is also reluctant to support the digital euro due to acceptance and misuse concerns. However, Europe recognises the need for stablecoins to strengthen its competition with the dollar and attract money flows.
Banks can't wait for a market-ready wholesale CBDC and are building a stablecoin machine to create demand for European government bonds. A balance must be found between preserving central bank money's relevance and not hindering private sector innovations.
The digital euro's progress in Brussels is slow, with a trilogue not expected until late 2026. EU finance ministers haven't decided on the digital euro's limit, which could affect banks' deposits and lending base. The EU parliament and finance ministers have other priorities, delaying the digital euro's progress. Meanwhile, banks are taking the initiative to launch a stablecoin to preserve the euro's position and central bank money's relevance.
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