Europe's 2026 Euro Stablecoin: A Calculated Move to Challenge Dollar Supremacy
- Nine European banks plan to launch a euro-backed stablecoin by 2026, aiming to challenge U.S.-dominated stablecoin markets. - The Dutch-based initiative aligns with MiCAR regulations, emphasizing compliance and strategic autonomy in cross-border payments. - With $292B in dollar-backed stablecoins currently dominating the market, the project seeks to address liquidity risks and institutional adoption gaps. - Citi forecasts stablecoin issuance could reach $4T by 2030, but euro-backed tokens remain a niche
A group of nine European banks, among them Unicredit,
The stablecoin will be overseen by a newly created entity in the Netherlands, and the consortium is welcoming more banks to participate. Floris Lugt, who leads digital assets at ING, pointed out that the initiative could provide “round-the-clock, nearly instant, cost-effective international payments” and programmable transfers, potentially simplifying supply chain processes and digital asset transactions title2 [ 2 ]. The project also aims to tackle rising worries about stablecoin vulnerabilities, such as liquidity issues, by utilizing MiCAR’s regulatory framework to foster confidence among cautious European investors title1 [ 1 ].
Market forecasts underscore the need for such initiatives. Citi predicts that the global issuance of stablecoins could hit $1.9 trillion by 2030, with optimistic estimates reaching $4 trillion. Nevertheless, euro-based stablecoins remain a small segment, with a current market value of about €500 million ($587 million), compared to Tether’s $172 billion in dollar-pegged tokens title4 [ 4 ]. Experts suggest that clear regulations under MiCAR may boost adoption, especially among institutional players, though strict compliance could discourage privacy-minded crypto users title1 [ 1 ].
The consortium’s setup demonstrates a cooperative approach within the industry. Founding banks include
Importantly, the initiative fits into the broader European push for a digital euro, even as the timeline for a central bank digital currency (CBDC) remains unclear. The European Central Bank has postponed the digital euro until 2029, giving private ventures a chance to fill the void. Some commentators have called the stablecoin a possible “backdoor CBDC,” though its foundation by commercial banks sets it apart from currencies issued directly by central banks title5 [ 5 ]. The project also reacts to recent U.S. policy changes, such as the Trump administration’s 2025 ban on CBDCs, which favored dollar-based stablecoins as a key financial instrument title5 [ 5 ].
There are still obstacles, including rivalry from established U.S. stablecoins and the challenge of expanding retail usage. Despite MiCAR’s protections, euro-backed stablecoins currently make up less than 1% of the $250 billion stablecoin market, according to CoinPedia. Supporters believe the consortium’s backing by reputable banks could draw both institutional and retail investors who are cautious of unregulated offerings, although the extra compliance expenses might make it less attractive to crypto traditionalists title6 [ 6 ].
The 2026 rollout of the stablecoin will serve as a test for Europe’s ability to combine innovation with strict oversight. If the project succeeds, it could drive further progress in digital payments, including tokenized asset settlements and automated international transactions. Citi analysts estimate that stablecoins could enable more than $50 trillion in payments each year by 2030, potentially accounting for a quarter of consumer transactions title4 [ 4 ]. The consortium’s development will be closely monitored as an indicator of Europe’s ambitions in digital finance.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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