Post by : Monika
On September 25, 2025, nine major European banks announced the creation of a new company to launch a euro-denominated stablecoin. A stablecoin is a type of digital currency that is linked to a traditional currency, in this case, the euro. The project aims to make digital payments safer, faster, and more efficient across Europe while following local financial regulations.
What Is a Stablecoin?
A stablecoin is a digital currency designed to keep its value stable. Unlike cryptocurrencies like Bitcoin or Ethereum, which can change value quickly, a stablecoin is linked to a traditional currency, such as the euro or U.S. dollar. This stability makes it more suitable for everyday transactions, payments, and business operations.
For example, if you want to buy something online or pay a supplier, using a stablecoin reduces the risk of sudden changes in value. It is designed to make digital money as reliable as traditional cash but with the speed and convenience of digital transactions.
These banks decided to collaborate to create a common digital payment solution that can be trusted by individuals, businesses, and financial institutions across Europe. By working together, they aim to create a standardized euro stablecoin that is reliable, secure, and regulated.
Company Formation and Oversight
The new company will be based in the Netherlands and will operate under the supervision and licensing of the Dutch central bank. Regulatory oversight is an essential part of the project, as it ensures that the stablecoin operates legally and safely within the European Union.
Being regulated by a central bank means the company must meet strict requirements for transparency, security, and risk management. This reassures users and businesses that the stablecoin is safe to use for transactions, payments, and other financial activities.
Enhancing Digital Payments – The euro stablecoin will make payments faster and more efficient. People and businesses can use it for online purchases, cross-border payments, and instant settlements.
Supporting Financial Sovereignty – By introducing a euro-backed digital currency, Europe strengthens its financial independence. It reduces reliance on foreign digital currencies and ensures that European financial infrastructure is controlled locally.
Promoting Financial Inclusion – The stablecoin can make digital financial services more accessible to people and businesses who may not have access to traditional banking. This encourages broader participation in the European economy.
Creating a Trusted Standard – The banks aim to set a high standard for regulated digital payments, ensuring that the stablecoin is secure, transparent, and widely accepted.
Potential for Expansion
Although the initial group includes nine banks, the company has said it is open to adding more partners in the future. Allowing other banks and financial institutions to join can increase adoption, improve liquidity, and expand the stablecoin’s reach across Europe.
More participants in the network mean more users, more transactions, and a stronger ecosystem for euro-based digital payments. It also encourages collaboration among European banks to create a unified approach to digital finance.
Leadership Appointment
The company is currently in the process of appointing a Chief Executive Officer (CEO). The CEO will play a critical role in leading the company, managing operations, coordinating between banks, and ensuring that the stablecoin project achieves its goals.
The CEO will also be responsible for overseeing regulatory compliance, technological development, and engagement with the broader financial and business community. A strong leader is essential for building trust and credibility in a new digital currency system.
Industry Reactions
Fiona Melrose, Head of Strategy at UniCredit, expressed her support for the initiative. She said, “We are contributing to fill the need for a trusted, regulated solution for on-chain payments and settlement, paving the way for a new standard in the digital asset space that will support Europe's growth and financial sovereignty.”
Industry experts have noted that collaboration between multiple major banks is unusual but necessary for creating a widely accepted stablecoin. Many believe that a euro-backed stablecoin regulated by banks and central authorities could become a model for other regions.
How the Euro Stablecoin Will Work
The stablecoin will operate on blockchain technology, which allows for secure and transparent transactions. Blockchain is a digital ledger that records every transaction in a way that is permanent and verifiable.
Users will be able to store the stablecoin in digital wallets, make payments, and transfer funds instantly. Businesses can use it for cross-border payments without the delays and high fees often associated with traditional banking.
The project also aims to ensure that the stablecoin is fully compliant with EU regulations, including anti-money laundering and anti-terrorism financing rules. This safeguards the financial system and prevents misuse.
Benefits for Users and Businesses
For individuals, the euro stablecoin offers a convenient, fast, and secure way to make payments online or through mobile apps. They can send money to family members, pay for goods and services, or manage savings digitally without relying on cash.
For businesses, it provides faster settlements, reduced transaction costs, and improved efficiency in cross-border trade. Companies can avoid currency conversion fees and delays, making international trade easier and more predictable.
Implications for Europe
The launch of a euro stablecoin represents a major step in modernizing Europe’s financial system. By adopting digital currencies backed by regulated banks, Europe strengthens its position in the global financial market.
The initiative also shows that European banks are taking a proactive role in digital finance, rather than leaving the market to technology companies or foreign crypto projects. It reflects a commitment to financial innovation while maintaining safety and stability.
Challenges Ahead
Despite its potential, the project faces challenges. Stablecoins must gain widespread acceptance among users and businesses, which requires trust and education. Users must understand how to use digital wallets and manage their digital currency securely.
The banks must also coordinate across countries and financial systems, ensuring compliance with EU regulations and adapting to technological changes. Additionally, competition from other stablecoins and cryptocurrencies could influence adoption and market growth.
Future Outlook
If successful, the euro stablecoin could set a new standard for regulated digital currencies worldwide. It may encourage other regions to develop their own digital currencies backed by central banks or major financial institutions.
The project also represents a step toward a cashless future, where digital payments become the primary mode of transactions. It aligns with broader trends in Europe to promote digital finance, innovation, and financial inclusion.
The collaboration of nine major European banks to launch a euro stablecoin marks a significant moment in digital finance. With regulatory oversight, clear objectives, and plans for expansion, the project aims to create a reliable, secure, and widely accepted digital payment solution.
By combining the strengths of major banks, blockchain technology, and regulatory compliance, the euro stablecoin can transform payments in Europe, increase financial inclusion, and support economic growth. As digital currencies continue to grow in importance, this initiative demonstrates how traditional banks can play a leading role in shaping the future of finance.
Europe’s approach provides a balance between innovation and security, ensuring that new technologies benefit both consumers and businesses while maintaining trust in the financial system.
Euro stablecoin launch European banks digital currency
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