Europe's Push for Digital Sovereignty: The Launch of a MiCAR-Compliant Euro Stablecoin by Nine Major Banks
In a landmark move, signaling Europe's ambition to reclaim control over its digital financial landscape, nine prominent European banks have united to develop a euro-denominated stablecoin. This consortium, comprising ING, Banca Sella, KBC Bank & Verzekering, Danske Bank, DekaBank, UniCredit, SEB, CaixaBank, and Raiffeisen Bank International AG, aims to introduce a blockchain-based payment instrument that complies with the EU's Markets in Crypto-Assets regulation (MiCAR). Set for initial issuance in the second half of 2026, this stablecoin represents a response to U.S.-backed digital currencies, fostering greater autonomy in payments and settlements.
For financial services across Europe, this initiative opens doors to innovative, regulated digital solutions that could reshape cross-border transactions, supply chains, and asset management.
Stablecoins, digital assets pegged to fiat currencies like the euro or dollar, have emerged as a cornerstone of the modern financial ecosystem. They provide stability in volatile crypto markets by maintaining a 1:1 value ratio with their underlying reserves, enabling seamless transactions without the price fluctuations typical of cryptocurrencies like Bitcoin. As of mid-2025, the global stablecoin market has ballooned to over $230 billion in market capitalization, driven by their utility in decentralized finance (DeFi), remittances, and institutional trading. Their appeal lies in features such as near-instant settlements, programmability for automated payments, and 24/7 availability — attributes that traditional banking systems often lack due to legacy infrastructure and regulatory constraints. In Europe, where fintech innovation is accelerating amid digital transformation, stablecoins offer executives a tool to enhance efficiency, reduce costs, and integrate with emerging blockchain networks.
“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.”
However, the stablecoin arena is overwhelmingly dominated by U.S.-issued tokens, underscoring the urgency of this European consortium. Tether's USDT commands approximately 58-70% of the market share, with a market cap exceeding $155 billion, while Circle's USDC holds 16-20%, together accounting for over 80% of all stablecoins in circulation. This U.S. hegemony, valued at around $292 billion overall, leaves euro-denominated stablecoins with a mere 500 million euros in market cap, less than 0.2% of the total. Such imbalance poses risks to European financial sovereignty, as reliance on dollar-pegged assets could erode the euro's global influence and expose the region to U.S. regulatory shifts or geopolitical tensions. European Central Bank (ECB) advisers have voiced concerns that dollar stablecoin dominance might undermine monetary policy control, advocating for regulated euro alternatives to bolster strategic autonomy. For fintech executives, this U.S. tilt means missed opportunities in a market projected by Citi to reach $1.9 trillion by 2030, potentially $4 trillion in a bullish scenario. The consortium's stablecoin addresses this gap, positioning Europe to capture a share of this growth through a homegrown, compliant solution.
“The USD-denominated stablecoin market is exploding now that they have been legitimized via the GENIUS Act, and many leading U.S. banks are working on their own versions. It’s reasonable to expect European banks to want a piece of this pie, and the profits that could come with it.”
Central to the initiative's credibility is MiCAR, the EU's comprehensive framework for regulating crypto-assets, which entered full force in 2024. MiCAR establishes uniform rules across member states, classifying stablecoins as either asset-referenced tokens (ARTs) or e-money tokens (EMTs) based on their structure. For issuers, it mandates authorization from national competent authorities, stringent reserve requirements (e.g., 1:1 backing with high-quality liquid assets), and ongoing supervision to mitigate risks like money laundering and financial instability. Unlike fragmented national approaches, MiCAR harmonizes the market, protecting consumers while fostering innovation. Stablecoins under MiCAR must maintain redemption rights, transparency in reserves, and governance standards, distinguishing them from unregulated tokens. This regulation has already enabled issuers like Circle to offer MiCAR-compliant USDC and EURC in Europe, but the consortium's effort marks a bank-led push, potentially accelerating adoption among risk-averse institutions.
The consortium itself is a powerhouse, drawing from diverse European geographies to ensure broad reach. Founding members span the Netherlands (ING), Italy (Banca Sella, UniCredit), Belgium (KBC), Denmark (Danske Bank), Germany (DekaBank), Sweden (SEB), Spain (CaixaBank), and Austria (Raiffeisen Bank International). They have established a new company in the Netherlands, seeking e-money institution licensing from the Dutch Central Bank (DNB), with a CEO appointment pending regulatory approval. The group remains open to additional banks, promoting a multi-bank model that pools resources, distributes risks, and enhances liquidity.
“Stablecoins are an important pillar of our digital asset strategy. We believe they have the potential to transform internal processes and offer our customers faster and more cost-effective transactions and payment options. We joined the consortium because we are convinced of the advantages of a multi-bank approach to issuing stablecoins. By leveraging our networks, pooling resources, distributing risk, and improving liquidity, we can create an ecosystem that capitalizes on the opportunities offered by the European MiCAR”
The stablecoin's features promise transformative benefits for financial services. It will enable near-instant, low-cost domestic and cross-border payments, bypassing traditional intermediaries and reducing settlement times from days to seconds. Programmability allows for automated conditional payments, ideal for supply chain finance where funds release upon milestone verification. In digital asset settlements, it supports tokenized securities and cryptocurrencies, streamlining operations in capital markets. For fintech executives, this means opportunities to develop value-added services like stablecoin wallets, custody solutions, and integrated platforms, potentially generating new revenue streams while complying with MiCAR's safeguards. ING's Floris Lugt highlighted blockchain's efficiency and transparency, noting the need for industry-wide standards to unlock these advantages.
This initiative has profound implications for Europe's fintech sector. It could catalyze the ECB's digital euro project, expected by 2029, by building infrastructure and familiarity with blockchain payments. Executives stand to gain from enhanced competitiveness against U.S. fintech giants, fostering innovation in areas like tokenization of real-world assets (RWAs) and DeFi integrations. However, challenges loom: achieving widespread adoption requires overcoming interoperability issues, addressing privacy concerns under GDPR, and navigating resistance from crypto purists wary of bank oversight. Regulatory hurdles, such as DNB approval, and market competition from established players like USDT could delay impact.
“A credible and reliable stablecoin may become an instrumental part of the future financial system. Through participation in the consortium, SEB has a valuable opportunity to explore and develop a technology that is regulated and stable, enhance our service offering and strengthen support for our clients.”
- John Turesson, Co-Head of Corporate & Investment Banking at SEB
On the side of dissenting opinions, Frederik Gregaard, CEO of the Cardano Foundation, has expressed apprehensions about the EU's MiCA framework's impact on stablecoins, warning that its rigorous stipulations (such as interest bans, daily issuance limits, mandatory EU bank reserves, and complex licensing) could inadvertently stifle market growth and liquidity.
“MiCA sets a high standard for regulatory clarity and responsible innovation, positioning Europe as a leader in crypto oversight. The requirement for 60% of stablecoin reserves to be held in low-risk, bank-held assets while banning interest payments is a bold move to prioritize stability and user protection.
However, the delisting of USDT from most European exchanges starting December 30 raises serious concerns. With Tether and Circle controlling 80% of the $203 billion global stablecoin market, Europe's $252 million Euro-backed stablecoins represent a tiny fraction of the pie. For issuers like Tether, complying with MiCA isn’t worth the effort for such a small market.
The bigger question is: What happens to liquidity? Stablecoins like USDT are essential for traders moving capital across exchanges. MiCA’s strict requirements risk pushing liquidity and innovation to other jurisdictions, leaving Europe at a competitive disadvantage in the global crypto economy.
MiCA’s vision is clear, but can Europe truly thrive as a crypto leader without access to the world’s most liquid stablecoins? Are we witnessing a step forward in regulatory excellence — or a retreat into market fragmentation?”
This bank consortium's stablecoin venture represents a significant opportunity to advance Europe's digital sovereignty, leveraging MiCAR's robust framework to challenge U.S. dominance in the stablecoin market and empower financial executives with tools for near-instant, low-cost payments, programmable transactions, and enhanced supply chain efficiencies. As the global stablecoin sector surges toward potential trillions in value by 2030, early adopters could position Europe as a leader in regulated blockchain innovation, integrating traditional banking with digital advancements for greater strategic autonomy.
However, realizing this potential is not without challenges: stringent MiCAR requirements risk dampening liquidity and driving institutional capital to more permissive jurisdictions like the U.S., as highlighted by Cardano Foundation CEO Frederik Gregaard's concerns over market fragmentation and Europe's small share of euro-backed stablecoins. Additionally, hurdles like interoperability with legacy systems, GDPR privacy compliance, regulatory approvals from bodies like the Dutch Central Bank, and competition from entrenched players such as USDT could hinder adoption and delay widespread impact. Success will depend on navigating these obstacles while capitalizing on the consortium's strengths to foster a resilient European digital ecosystem.