A consortium of 10 banks is preparing to launch a stablecoin linked to the euro, anticipated to receive regulatory approval from the Dutch Central Bank and go live by the latter half of 2026.

In a statement from Tuesday, BNP Paribas announced its participation with nine other banks in this initiative. The newly established entity, Qivalis, aims to create a stablecoin that aligns with the EU’s Markets in Crypto-Assets regulations, pending the necessary regulatory blessings.

“Creating a euro stablecoin is not merely a matter of expediency; it is crucial for monetary sovereignty in today’s digital landscape,” said Qivalis CEO Jan-Oliver Sell. Creating a euro stablecoin is not merely a matter of expediency; it is crucial for monetary sovereignty in today’s digital landscape.

This move follows US regulatory advancements towards establishing a framework for payment stablecoins, as underscored by the GENIUS Act signed into law in July by former President Donald Trump.

Dutch Central Bank Governor Olaf Sleijpen has raised concerns regarding the potential impacts of the expanding stablecoin market on monetary policy. The European Central Bank (ECB) has reported that while the risks posed by stablecoins seem manageable, their rapid expansion necessitates vigilant monitoring.

As of the latest estimates, euro-denominated stablecoins represent a market capitalization of less than €350 million ($407 million), making up a mere fractional percentage of the global market as of July.

Tether Withdraws from Euro Denominated Coin Competition

Tether recently ceased the redemption of its euro-pegged stablecoin, EURt, on November 25, following its announcement to withdraw support last year. The decision was influenced by the regulatory landscape of the EU’s MiCA framework, according to CEO Paolo Ardoino, who highlighted the potential risks for stablecoins under these regulations.