In a move set to reshape the future of European finance, nine of the continent’s largest banks have announced a landmark partnership to develop a euro-backed digital currency, aiming to launch the stablecoin in the second half of 2026. The initiative, unveiled in late September 2025, marks the most ambitious effort yet by European financial institutions to challenge the dominance of US dollar-backed stablecoins and to bolster Europe’s strategic autonomy in the rapidly evolving world of digital payments.
The banking giants behind this project—ING, UniCredit, KBC, Danske Bank, DekaBank, SEB, CaixaBank, Banca Sella, and Raiffeisen Bank International—collectively serve millions of customers and manage hundreds of billions in assets across Europe. Their joint announcement, as reported by FinTech Futures and other sources, emphasized the creation of “a real European alternative to the US-dominated stablecoin market, contributing to Europe’s strategic autonomy in payments.”
Currently, the global stablecoin market is overwhelmingly led by digital currencies pegged to the US dollar, granting the United States significant influence over international digital payments. Despite the size of Europe’s economy, euro-backed stablecoins account for less than 1% of the market. The consortium’s new initiative is designed to change that, offering European businesses and consumers a homegrown alternative that aligns with the region’s regulatory standards and economic interests.
The timing of this announcement is no coincidence. Europe’s cross-border payments market is booming, exceeding $250 billion in 2025 and projected to reach $320 billion by 2030. The new euro stablecoin, leveraging blockchain technology, promises to capture a significant share by enabling faster, cheaper, and more transparent transactions than traditional wire transfers. As Floris Lugt, Digital Assets lead at ING, put it, “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.”
So, how will this new system work? Each participating bank will offer its own wallet and custody services, allowing customers to access the stablecoin through familiar, trusted channels. The digital currency itself will operate on blockchain infrastructure, supporting near-instant, round-the-clock settlements. Unlike conventional bank transfers, which can take days and are restricted to business hours, this stablecoin will allow money to move at any time—day or night, weekday or weekend.
One of the standout features of the new euro stablecoin is its support for programmable payments. In practical terms, this means businesses can automate complex payment processes, such as triggering supplier payments when goods are received or automating payroll once certain conditions are met. Such innovations could dramatically streamline supply chain management and reduce administrative burdens for companies across the continent.
Regulatory compliance stands at the heart of the project. The consortium will operate under the European Union’s Markets in Crypto-Assets Regulation (MiCA), a sweeping set of rules designed to bring order and transparency to the digital currency sector. MiCA requires stablecoin issuers to obtain proper licenses, maintain full reserves, and submit to regular audits. To this end, the banks have formed a new company in the Netherlands, which will seek an e-money license from the Dutch Central Bank. This license will enable the stablecoin to operate across all EU member states through a process known as “passporting.”
MiCA’s requirements are strict: issuers must hold at least 60% of their reserves in European banks and provide transparent reporting to regulators. These standards have already had a profound impact on Europe’s digital currency landscape. Earlier this year, major exchanges removed non-compliant stablecoins such as Tether’s USDT, creating an urgent need for regulated alternatives. The new euro stablecoin, fully MiCA-compliant, is poised to fill that gap.
This initiative emerges alongside the European Central Bank’s (ECB) ongoing work on a digital euro, which could become a reality by 2029. However, as noted by several industry observers, the bank-led stablecoin project could hit the market years earlier, potentially capturing significant market share before the official central bank digital currency arrives. The ECB, for its part, has emphasized the importance of maintaining Europe’s economic and financial stability in a changing digital landscape. In a recent keynote speech, Piero Cipollone, Member of the Executive Board of the ECB, highlighted the digital euro’s potential to “bolster Europe’s unity, safeguard autonomy and strengthen resilience in the face of ever-evolving challenges.”
“The euro is more than just a currency. It is a commitment to stability, to unity and to a shared European destiny,” Cipollone said. He stressed that as cash usage declines and digital payments become the norm, the digital euro would ensure that Europeans retain the freedom to choose how they pay, using sovereign money anywhere in the euro area.
The move to launch a euro stablecoin is also a response to concerns about Europe’s dependence on non-European payment solutions. Currently, two-thirds of card-based transactions in the euro area are processed by international schemes, often controlled by non-European companies. This reliance, Cipollone warned, “puts us at the mercy of decisions made elsewhere” and threatens Europe’s ability to act independently in critical areas of the economy.
To address these vulnerabilities, the new stablecoin’s infrastructure will be distributed across multiple regions, each with redundant servers to ensure resilience against cyberattacks or technical failures. Additionally, the project’s open invitation for other banks to join signals an ambition to create the largest bank-backed stablecoin network in Europe, further enhancing the system’s robustness and reach.
For consumers and businesses, the benefits could be profound. Traditional international wire transfers often cost between $15 and $50 and can take several days to complete. The euro stablecoin, by contrast, promises near-zero fees and instant settlement, making cross-border transactions as easy as sending a text message. This could be a game-changer for European businesses operating across national borders and for individuals sending money to family or friends in other EU countries.
The project also holds promise for innovation in the broader fintech sector. As highlighted in FinTech Futures’ roundup of top September launches, the stablecoin’s programmable features and open infrastructure could enable a new generation of digital asset settlement processes and supply chain management tools, fostering competition and creativity among Europe’s fintechs and established banks alike.
As Europe accelerates its journey toward a digital payments future, the success or failure of this bank-led stablecoin initiative will likely have far-reaching implications—not just for the continent, but for the global financial system. If successful, it could serve as a blueprint for other regions seeking to assert greater control over their digital economies and reduce dependence on foreign financial infrastructure.
In the coming months and years, all eyes will be on the consortium as it navigates the technical, regulatory, and competitive challenges ahead. One thing is certain: the digital euro revolution is no longer a distant prospect—it’s happening now, and it promises to transform how Europeans send, receive, and think about money.
