A euro stablecoin could threaten US dominance
26 SEPT, 2025
By 21Shares
By Adrian Fritz, Head of Research, 21Shares
News has just come out that nine major European banks will jointly launch a stablecoin tied to the euro, thus creating a potential turning point for the digital asset market in the Old Continent. Unlike EUR collateralized tokens issued in the past, this initiative is accompanied by strong institutional credibility, very wide distribution networks and common regulation; all essential elements to reach a sufficiently large market size.
Reaffirming European financial sovereignty
Today the dollar dominates 99% of the $300 billion stablecoin market, but a digital currency anchored to the euro, guaranteed by solid banking institutions, compliant with MiCA regulation on e-money and supervised by the central bank of the Netherlands represents a valid alternative.
In fact, by adhering to the rigorous regulatory standards that MiCA imposes, it could become the first widely reliable instrument in the single European currency, both for retail investors and for institutional ones, strengthening the role of the EUR in the field of digital economy.
Market structure and innovation in payments
The implications of such a novelty go beyond the scope of cryptocurrency trading. A regulated euro stablecoin can simplify cross-border payments, payrolls and B2B flows, offering a programmable currency 24 hours a day, 7 days a week, and reducing dependence on traditional payment systems.
On the front of capital markets, it unlocks a lot of potential for tokenized securities and funds, an area where European banks are already trying to enter. In decentralized finance, euro liquidity pools could expand significantly, creating money markets in this institutional-level currency and reducing systemic dependence on dollar guarantees. By the third quarter of 2025, the capitalization of euro stablecoins has grown by about 60% on an annual basis, reaching about 500 million euros, and this consortium has the financial solidity to bring this figure to much higher levels.
Competitive and strategic dynamics
This launch also increases the pressure on the European Central Bank to clarify its roadmap towards the digital euro. With private institutions moving first, the ECB is faced with a choice: compete, integrate or coexist. For global markets, the emergence of a robust EUR stablecoin will diversify assets, attract capital from players who until now had decided to stay out of the cryptocurrency world and potentially rebalance liquidity, at least in part, from the dominance of the United States.
In conclusion, a euro stablecoin issued by banks is much more than a simple token, it is a strategic lever that could reshape the infrastructure of the European market, the adoption of digital finance and the global balance of monetary power in the on-chain economy.
