Twelve leading European banks have formed a consortium to develop a euro-backed stablecoin, responding to growing concerns about the dominance of dollar-pegged digital currencies in global crypto markets. The initiative, confirmed by sources familiar with the matter, seeks to establish a digital euro alternative that complies with EU regulations while ensuring liquidity and stability.
According to analysts, the move comes as dollar-linked stablecoins like USDT and USDC account for over 90% of the $150 billion stablecoin market. “Europe risks being left behind in the digital currency race,” said one banking executive involved in the project, who spoke on condition of anonymity. The consortium includes major institutions from Germany, France, Italy, and Spain, though names have not been officially disclosed.
The European Central Bank has been exploring a digital euro since 2021, but progress has been slow compared to private-sector dollar stablecoins. This new banking initiative could accelerate adoption while maintaining regulatory oversight. However, skeptics question whether a fragmented approach among multiple banks can compete with the streamlined issuance of centralized dollar stablecoins.
Market observers suggest the success of this project could determine whether the euro remains relevant in the rapidly evolving world of decentralized finance. The consortium plans to launch a pilot program by late 2026.