When it emerged, in late September, that a consortium of nine European banks, including heavy hitters such as ING and UniCredit, were preparing to launch a euro-denominated stablecoin, the first question that sprung to mind was “Cui bono?” Who – or rather what – stands to benefit the most from the initiative? And, just as importantly, who loses out?
The left curve answer to these questions posits the European Union as being the primary beneficiary, burnishing its blockchain credentials and allowing it to reclaim some of the ground it’s lost to the U.S. following the passage of the GENIUS Act earlier this year. America is moving fast and regulating lightly, allowing enterprises to innovate instead of being left behind by nimbler overseas startups. Now it’s Europe’s turn to play catch-up.
Europe Enters the Fray
The issuance of a European bank-supported euro stablecoin is clearly good news for businesses operating in the EEA, not just in terms of the benefits the new asset promises for B2B payments and settlement, but in effectively green-lighting blockchain usage. The EU’s MiCA framework may be thoughtful legislation, assembled with great consideration, but it’s also onerous, placing a high bar on European businesses wanting to issue or interact with stablecoins.
The nine bank-supported euro stablecoin in the works doesn’t change this – it too has to abide by MiCA – but it’s a sign of conviction. If some of Europe’s largest financial juggernauts are willing to put their names to blockchain-based instruments, there’s now nothing stopping other EU businesses from following suit. Not in a bid to appear relevant, but to unlock the well-documented benefits that stablecoins provide.
One figure who’s particularly bullish on the project on account of its broader significance is Andrei Grachev, Founding Partner of synthetic stablecoin protocol Falcon Finance. In his view, “The decision by major European banks to develop a euro-denominated stablecoin under the MiCA framework is not just a technical upgrade. It marks a strategic shift in how money moves. When institutions like ING and UniCredit begin issuing programmable currency on public infrastructure, it signals that blockchain is no longer a parallel system. It is becoming part of the core financial plumbing.”
He adds: “This move also reframes the conversation about trust. For banks to issue stablecoins, they must operate under rules that meet regulatory standards while allowing for programmability and settlement efficiency. That sets a high bar here because it suggests that the future of sovereign-grade stablecoins will not come from informal experimentation, but from institutions that can scale both compliance and capital.”
Can a Euro Stablecoin Erode USD Supremacy?
The advent of a euro stablecoin naturally begs the question of whether such a vehicle can diminish USD dominance. In the short term, the answer is an unequivocal “No.” More than 99% of stablecoins are USD-backed, and it’s hard to see any foreign currency, be it the euro, yen, or renminbi, changing that. But at the very least, a bank-approved euro stable will put Europe on the map as a seat of stablecoin innovation and perhaps prevent it ceding further ground to the U.S.
Otherwise, unchecked growth – projected to swell the overall stablecoin market to $2 trillion by 2028 – could further entrench USD hegemony, deleteriously affecting European monetary sovereignty and even influencing ECB policy. A viable euro alternative could stop the slide. A compliant, euro-pegged stablecoin tailored for European users is likely to see wide adoption in the single market, where regulatory alignment under MiCA lowers barriers for institutions and consumers alike.
Early movers such as Societe Generale’s euro stablecoin have demonstrated the feasibility of this, but scale has been elusive without collective bank backing. If the new euro token captures even a fraction of intra-EU payments, it could siphon liquidity from USD, bolstering the euro’s international role. Moreover, as emerging economies grapple with dollar stablecoin influxes, a euro option provides a neutral bridge, mitigating geopolitical frictions. Countries that refuse to touch a USD stablecoin on ideological grounds may be persuaded to utilize a euro equivalent for settlement.
What Does It All Mean for Blockchain?
If the nine-bank euro stablecoin gets off the ground, the real winner in all of this might not be a continent, regulatory framework, or fiat currency – it might be blockchain itself. Because blockchain don’t care who’s using it or for what: USD; EUR; JPY – it makes no difference. All that matters is that it is being used, for in a world in which everyone – from the smallest business owner to largest corporation – is using blockchain in their daily lives, regulators have no option but to support its deep integration and wide adoption.
While the underlying technology facilitating multi-currency stablecoins remains unchanged, Europe’s move suggests a shift in the type of entities issuing tokenized assets onchain. “The implication is that we are moving toward a hybrid architecture,” predicts Andrei Grachev. “Public rails, institutional issuers, and regulated frameworks will coexist. The key question now is not whether banks will use stablecoins but whether they will shape their evolution or be forced to catch up later.”
It’s a case of innovate or die in other words, and after weighing up their options, European banks have plumped for the former. As Europe steels itself against digital dollar tides, the euro stablecoin stands as both shield and sword: defending sovereignty while slashing at the red tape with which the region is synonymous. The consortium’s gambit means that banks are now belatedly gearing up to shape stablecoins while ensuring that blockchain’s liquidity runs through Europe’s veins.
Whether this dilutes USD’s grip or ignites a transatlantic tech race, one thing is clear: the future of money is no longer unilateral. Now everyone wants in.
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