When it was revealed in late September that a consortium of nine European banks, including leading banks such as ING and UniCredit, was preparing to issue a euro-denominated stablecoin, the first question that came to mind was “Cui bono?” Who – I mean what – Who will benefit most from this initiative? And just as importantly, who will lose?
Left-curve answers to these questions assume that the European Union is the main beneficiary, honing its blockchain credentials and allowing it to regain some of the ground it lost to the United States after the passage of the GENIUS Act earlier this year. By moving quickly and relaxing regulations, America allows companies to innovate without being left behind by nimble foreign startups. Now it’s Europe’s turn to make a comeback.
Europe enters the fray
The issuance of a Eurostablecoin backed by European banks is clearly good news for companies operating within the EEA, not only for the benefits the new asset promises for B2B payments and settlements, but also for effectively giving the green light to the use of blockchain. The EU’s MiCA framework may be a carefully crafted and thoughtful piece of legislation, but it is also a burdensome piece of legislation that imposes high hurdles for European companies wishing to issue or interact with stablecoins.
The nine bank-backed euro stablecoin in development will not change this – it will also have to comply with MiCA – but it is a sign of belief. If some of Europe’s biggest financial giants want to invest in blockchain-based financial products, there’s nothing stopping other EU companies from following suit. Not to seem relevant, but to highlight the well-documented benefits that stablecoins offer.
One person who is particularly bullish on the project due to 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 based on the MiCA framework is not just a technological upgrade. It signals a strategic change in the way money moves. Institutions like ING and UniCredit to start issuing programmable currencies on public infrastructure show that blockchain is no longer a parallel system. Blockchain is becoming part of the core financial plumbing.”
He added: “This move is also reframing the trust debate. For banks to issue stablecoins, they must operate under rules that meet regulatory standards, while considering programmability and payment efficiency. This sets a high bar here, as 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.”
Could Euro stablecoins erode USD dominance?
The emergence of euro stablecoins naturally raises the question whether such instruments can weaken the dominance of the US dollar. In the short term, the answer is clearly no. More than 99% of stablecoins are backed by the US dollar, and it is unlikely that foreign currencies such as the euro, yen, or renminbi will change that. But at the very least, bank-approved euro stability would put Europe on the map as a center of stablecoin innovation and perhaps prevent Europe from losing further ground to the US.
Otherwise, the unchecked growth of the overall stablecoin market, which is predicted to swell to $2 trillion by 2028, could further strengthen the hegemony of the US dollar, negatively impact European monetary sovereignty, and even influence ECB policy. A viable alternative to the euro could halt the decline. A compliant, euro-pegged stablecoin tailored for European users has the potential to be widely adopted in the single market, with regulatory alignment under MiCA lowering barriers for both institutions and consumers.
Early moves such as Société Générale’s euro stablecoin demonstrate the feasibility of this, but it will be difficult to scale up without support from across banks. If the new euro token captures even a portion of payments within the EU, it could siphon liquidity from the US dollar and strengthen the euro’s international role. Furthermore, as emerging economies struggle with the influx of dollar stablecoins, euro options provide a neutral bridge to ease geopolitical friction. Countries that refuse to use USD stablecoins for ideological reasons could be persuaded to use euro equivalents for payments.
What does that mean for blockchain?
If the nine-bank Euro stablecoin takes off, the real winner in all this may not be the continent, regulatory frameworks, or fiat currencies, but the blockchain itself. Because blockchain doesn’t care who is using it and for what purpose. Euro; JPY – no difference. All that matters is that blockchain is used. Because in a world where everyone, from small business owners to large corporations, uses blockchain in their daily lives, regulators have no choice but to support the tight integration and widespread adoption of blockchain.
While the underlying technology that powers multi-currency stablecoins has not changed, the European move signals a change in the type of entity issuing tokenized assets on-chain. “This means we are moving towards a hybrid architecture,” predicts Andrei Grachev. “Public rail, 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 play catch-up.”
In other words, it’s a matter of innovating or dying, and European banks have weighed their options and chosen the former. As Europe battles the digital dollar trend, Eurostablecoins serve as both shield and sword, protecting sovereignty while cutting through the bureaucracy that has become synonymous with the region. The consortium’s strategy means banks are gearing up for a belated stablecoin formation, while ensuring blockchain liquidity flows through European veins.
Whether this weakens the dollar’s grip or ignites a transatlantic technology race, one thing is clear: the future of money is no longer one-sided. Now everyone wants to join.
