Euro-Backed Stablecoin Set for 2026: Europe’s Push to Counter U.S. Dominance

European banks are set to launch a euro-backed stablecoin by the second half of 2026, with nine major institutions—including ING, UniCredit, Danske Bank, and Raiffeisen Bank International—announcing a collaborative initiative under the European Union’s Markets in Crypto-Assets Regulation (MiCA) framework. The project aims to establish a "real European alternative" to the U.S.-dominated stablecoin market, as stated in a joint declaration by the banks on September 25, 2025. The stablecoin will leverage blockchain technology to enable near-instant, low-cost cross-border payments and settlements, operating 24/7 and supporting programmable payment features. The initiative also targets improvements in supply chain management and digital asset settlements, spanning securities and cryptocurrencies.

The consortium emphasizes strategic autonomy in payments, reducing Europe’s reliance on U.S. dollar-denominated stablecoins. The stablecoin will be issued by a newly established Netherlands-based company, which will seek licensing as an "e-money institution" from the Dutch Central Bank. Floris Lugt, ING’s Digital Assets lead and a public representative of the initiative, highlighted the importance of blockchain’s programmability and real-time cross-currency settlement capabilities in enhancing efficiency and transparency. The project is open to additional banks joining the original nine, fostering an industry-wide standard for digital payments.

Market demand for euro-backed stablecoins has been growing in Europe, according to a 2024 Kaiko Research analysis. While European crypto trading volumes have historically lagged behind the U.S. and Asia-Pacific regions, euro-backed stablecoin transactions have seen consistent volume increases since early 2025. Analyst Anastasia Melachrinos of Kaiko Research noted that U.S. dollar-backed stablecoins like USDC could benefit from the EU’s evolving regulatory environment, though the new euro-backed stablecoin is expected to compete directly with U.S. alternatives.

The consortium’s stablecoin will prioritize compliance with MiCA, ensuring regulatory alignment across the EU. The initiative’s technical design aims to address gaps in current payment systems, offering 24/7 accessibility and reducing friction in cross-border transactions. By positioning itself as a trusted European payment standard, the stablecoin could reshape digital financial infrastructure, particularly in securities and cryptocurrency settlements.

While the project’s timeline remains anchored to the second half of 2026, challenges such as licensing approval and market adoption will determine its success. The consortium’s focus on scalability, interoperability, and regulatory compliance positions it to capture a growing segment of the global stablecoin market. As European institutions increasingly adopt digital assets, the stablecoin could serve as a cornerstone for the EU’s broader digital payments ecosystem.

Source: [1] Launch Of Euro-Backed Stablecoin In H2 2026? Nine European Banks Unite (https://finance.yahoo.com/news/launch-euro-backed-stablecoin-h2-133251557.html)