12 European Banks Unite to Launch Euro Stablecoin via Qivalis - Can They Break Dollar Dominance?

regulatory_rachel
Sun, 22 Feb 2026 04:33:58 +0000

The stablecoin landscape is about to get a serious regulatory and institutional shake-up. Twelve major European banks — including BBVA, BNP Paribas, CaixaBank, Danske Bank, DekaBank, DZ BANK, ING, KBC, Raiffeisen Bank International, SEB, UniCredit, and Banca Sella — have formed Qivalis, an Amsterdam-based joint venture aiming to issue a MiCA-compliant euro stablecoin by the second half of 2026.

As someone who has spent years tracking stablecoin regulation from both sides of the Atlantic, I find this development to be one of the most consequential moves in digital asset policy since MiCA itself was enacted. Let me break down why.

The Dollar Problem in Stablecoins

Right now, approximately 99% of all stablecoins in circulation are denominated in US dollars. Tether’s USDT commands roughly 60% of the stablecoin market with a capitalization around $175 billion, while Circle’s USDC holds about 25% at $73 billion. Euro-denominated stablecoins? They total a mere EUR 395 million — a rounding error in the grand scheme. This dollar dominance in on-chain settlement means that even European DeFi users, merchants, and institutions are routing their digital payments through USD-pegged instruments. For European policymakers, this represents a slow erosion of the euro’s relevance in the digital payment rails that are increasingly defining global commerce.

What Makes Qivalis Different

Qivalis is not another crypto-native startup issuing a stablecoin from a Caribbean jurisdiction. This is a consortium of regulated European banks — institutions collectively holding trillions in assets — creating a purpose-built entity to issue an Electronic Money Token (EMT) under the full weight of the EU’s Markets in Crypto-Assets Regulation (MiCA).

Key structural features that stand out:

Regulatory pathway: Qivalis is pursuing an Electronic Money Institution (EMI) license from the Dutch Central Bank (DNB). This is a well-established regulatory framework — not experimental, not uncertain. The EMI license provides passportability across all EU member states, meaning the stablecoin can be used throughout the bloc without additional country-by-country approvals.

1:1 euro backing with high-quality liquid assets: Unlike algorithmic stablecoins or those with opaque reserves, Qivalis commits to full backing held at regulated custodians with segregated reserves. This is the gold standard that regulators have been demanding.

MiCA-compliant white paper: The issuance will include full disclosure documentation as required by MiCA, giving users and institutions clarity on reserves, risks, redemption rights, and governance.

Leadership credibility: CEO Jan-Oliver Sell brings experience from Coinbase’s German operations, while the board is chaired by Howard Davies, former chair of NatWest. This is a deliberate blend of crypto-native operational knowledge and traditional banking governance.

The Strategic Significance

BBVA’s decision to join Qivalis after shelving its own solo stablecoin effort is perhaps the most telling signal. The trend is clearly moving from fragmented, individual bank experiments toward coordinated infrastructure. This mirrors how European payments evolved with initiatives like SEPA — the Single Euro Payments Area — where cooperation, not competition, was the path to scale.

The consortium explicitly frames its mission around monetary sovereignty — keeping critical payment infrastructure within the EU’s regulatory perimeter. In a world where US-based stablecoin issuers could theoretically freeze or restrict euro-denominated transactions based on US sanctions policy, having a European-regulated alternative is not just a competitive play; it is a matter of financial autonomy.

Use Cases and Market Potential

Qivalis is targeting several concrete use cases:

1. 24/7 cross-border payments: Unlike traditional SEPA transfers that still operate on banking hours, a euro stablecoin settles around the clock.

2. Programmable payments: Smart contract-enabled conditional payments for supply chain management, escrow, and automated treasury operations.

3. Digital asset settlement: Providing a regulated euro settlement layer for tokenized securities, bonds, and other on-chain financial instruments.

4. Merchant acquiring: Enabling European merchants to accept digital payments without exposure to USD currency risk.

Can They Actually Break Dollar Dominance?

This is the trillion-dollar question — quite literally, since the stablecoin market is projected to exceed $1 trillion in total circulation by late 2026. My honest assessment: Qivalis alone will not dethrone USDT or USDC. Dollar stablecoins benefit from deep liquidity, extensive DeFi integrations, and global demand for dollar-denominated assets.

However, Qivalis does not need to dominate globally to succeed. If it captures even a meaningful portion of intra-European digital payments — corporate treasury flows, merchant settlement, cross-border B2B transactions — it could grow the euro stablecoin market from its current sub-$500 million to tens of billions. That would be transformative for European digital finance.

The real test will be adoption mechanics: Will DeFi protocols integrate it? Will exchanges list it with deep liquidity pairs? Will corporates trust bank-backed rails over crypto-native ones? And critically, will the EMI licensing process complete on schedule, or will regulatory timelines slip?

Open Questions for This Community

I would love to hear perspectives from builders, traders, and economists in this community:

For DeFi builders: Would you integrate a bank-issued, MiCA-compliant euro stablecoin into your protocols? What are the technical and philosophical trade-offs?

For traders: Does a regulated euro stablecoin create new arbitrage or trading pair opportunities, or is the dollar liquidity advantage insurmountable?

For startup founders: Does Qivalis open new business opportunities in European Web3, or does the bank-led model crowd out innovation?

For tokenomics thinkers: How should a bank-consortium stablecoin handle value accrual, governance, and incentive alignment differently from crypto-native issuers?

Compliance enables innovation — and Qivalis may be the clearest example yet of that principle in action.