Euro Banks Team to Counter ‘US-Dominated’ Stablecoin Space
A group of Europe’s banks are teaming to develop a euro-denominated stablecoin.
The new token is aimed at becoming “a trusted European payment standard in the digital ecosystem,” per a Thursday (Sept. 25) news release from Denmark’s Danske Bank, which is joined in the partnership by ING, Banca Sella, KBC, DekaBank, UniCredit, SEB, CaixaBank and Raiffeisen Bank International.
“The stablecoin will provide near-instant, low-cost payments and settlements,” the release said. “It will enable 24/7 access to efficient cross-border payments, programmable payments, and improvements in supply chain management and digital asset settlements, which can vary from securities to cryptocurrencies.”
The stablecoin will be regulated by the European Union’s Markets in Crypto-Assets regulation (MiCA), and is expected to be first issued in the second half of next year.
The nine banks have formed a new company in the Netherlands, hoping to be licensed and supervised by the Dutch Central Bank as an e-money institution. This group is open to other banks joining, the release said.
The banks say their goal is to present a European alternative to what they say is a “US-dominated” stablecoin market, while also “contributing to Europe’s strategic autonomy in payments.” Individual banks will be able to offer value added services, like a stablecoin wallet and custody.
“Digital assets have the power to transform the financial landscape — not just by introducing new forms of money, but by unlocking meaningful efficiencies and savings for both the financial sector and customers,” added Flaminia Lucia Franca, Danske’s head of transaction banking.
The announcement follows a partnership announced this spring by four of America’s largest banks — JPMorgan Chase, Bank of America, Wells Fargo and Citigroup — to explore the launch of a jointly operated stablecoin.
As PYMNTS wrote in May, the proposed stablecoin would be backed by fiat held at the banks and operate like other stablecoins, but with one key difference: trust in institutional governance.
This vision is a marked departure from the early crypto sector ethos of disrupting incumbent financial players, that report added. Rather, it’s a bet that those incumbents are best positioned to bring digital currencies into the mainstream.
“When you think about the needs of every FinTech or payments company, or a bank that wants to enter the [stablecoin] space, they need secure infrastructure, from the creation of assets, such as tokenizing them, to holding them, and of course moving them,” Utila Co-founder and CEO Bentzi Rabi told PYMNTS in April. “Everyone will enter the stablecoin era in the end.”
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