European Banks Racing to Adopt Euro Stablecoin as Global Competition Intensifies: Elliptic Report

Traditional finance giants finally wake up to the stablecoin revolution.

European banking institutions are making serious moves toward euro-denominated digital currencies as the global race for CBDC dominance heats up. According to blockchain intelligence firm Elliptic, major financial players across the EU are actively exploring stablecoin integration—a clear signal that legacy banks recognize the inevitable shift toward digital assets.

The Eurozone's Digital Awakening

Banks that once dismissed cryptocurrency as a fringe technology now scramble to develop their own euro-pegged stablecoins. They see the writing on the wall: either innovate or get left behind as digital payment systems reshape global finance. The move represents a strategic pivot toward blockchain efficiency while maintaining regulatory compliance.

Global Pressure Forces Action

With China advancing its digital yuan and the US exploring dollar-based digital currencies, European financial institutions can no longer afford to watch from the sidelines. The urgency reflects growing awareness that first-mover advantage in the stablecoin space could determine future financial influence. It's almost touching to see banks embrace innovation—about a decade after they should have.

Legacy finance playing catch-up with technology they once mocked. How refreshing.

Growing Appetite for Digital Assets

A consortium of European banks is reportedly exploring the launch of a euro-denominated stablecoin, showing the industry’s growing appetite for tokenized assets and digital money.

Nine European banks will launch a MiCA-regulated, euro-backed stablecoin that will contribute to Europe’s strategic autonomy in payments.#EURStablecoin #MiCARegulationhttps://t.co/FEUGRf7hgS

The banking consortium includes ING, Banca Sella, KBC, Danske Bank, DekaBank, UniCredit, SEB, CaixaBank, and Raiffeisen Bank International.

This step could provide a much-needed alternative to dollar-backed stablecoins, which currently dominate the market. Yet without urgency and scale, experts warn Europe risks ceding ground to overseas competitors.

Aruliah from Elliptic notes that banks are eager to engage. “European banks have shown their appetite to engage with stablecoins and tokenized assets, but they need clear regulatory pathways and the right tools to manage risk,” he said.

Pressure from Global Peers

Across the Atlantic, the U.S. has taken major strides toward developing regulated stablecoins, while regulators in Asia, including Singapore’s Monetary Authority (MAS) and the Hong Kong Monetary Authority (HKMA), are moving decisively to shape frameworks and encourage adoption.

“News that a consortium of European banks is exploring a euro stablecoin is a positive signal, but it must be matched by scale, urgency, and more clarity on regulatory expectations,” Aruliah added.

“If European banks don’t move quickly to adopt and scale credible euro-denominated stablecoins in a robust and SAFE way, there is a real risk that dollar-backed alternatives will continue to dominate by default.”

ECB Concerns Loom Large

The European Central Bank (ECB) has already raised alarms about the region’s overreliance on U.S. dollar-based stablecoins. Without credible euro-backed offerings, the ECB fears Europe could see its financial infrastructure increasingly dependent on foreign products.

Such a development WOULD weaken the region’s monetary sovereignty and influence in global finance, explains Aruliah.

The Markets in Crypto-Assets Regulation (MiCA) offers Europe a robust legal framework, while progress on the digital euro provides a complementary initiative. However, translating these frameworks into adoption requires coordination between policymakers and financial institutions.

Europe’s Chance to Lead

Aruliah argues that the first jurisdictions to move decisively will set the global standards and capture the lion’s share of capital flows. For Europe, the next few years will be key.

A competitive euro stablecoin could strengthen the euro’s international role, support financial development, and enhance resilience against overdependence on dollar-backed products.

If European banks and regulators act decisively, the region has a chance to reclaim ground in the stablecoin race. If not, it risks being left behind in a dollar-dominated future.