A group of European banks is joining forces to create a new company that will release a euro-denominated stablecoin, in a move to compete with American fintech companies working on similar projects.
Stablecoins are crypto-based tokens that maintain a constant value and are backed by traditional currencies, making them more stable than other crypto-tokens. They are a new trend in financial markets and are becoming increasingly common. Recently, US firms announced similar plans after US President Donald Trump signed a law to regulate stablecoins. Meanwhile, the European Central Bank remains sceptical of them. It is working on a digital euro, an option that commercial banks do not particularly like.
Currently, the US is already in a hegemonic position in the stablecoins sector, with euro-denominated ones totalling only $620 million out of a total market of $300 billion, according to recent figures from the Bank of Italy. One of the biggest euro-denominated stablecoins is the one released in 2023 by Société Générale’s crypto unit SG-FORGE.
According to the nine banks that will release the new stablecoin, their idea is that it will be ideal for quick, low-cost payments and settlements. The group of banks includes European giants like ING and UniCredit, plus Banca Sella, KBC, CaixaBank, DekaBank, Danske Bank, SEB, and Raiffeisen Bank International.
