BBVA joins bank-led push to launch euro stablecoin and reduce dollar dominance

A group of established European banks has moved from discussion to concrete action by expanding a consortium designed to issue a euro-denominated stablecoin under bank custody. BBVA’s participation deepens the membership of what is shaping up as a pan-EU banking initiative that intends to offer a regulated, euro-pegged token for payments and settlement on distributed ledgers. The project targets a gap in the market: current stablecoins are overwhelmingly tied to the dollar and largely issued by non-bank entities. By anchoring the token to a network of licensed banks, the consortium aims to deliver an instrument that benefits from regulated oversight, familiar custody models and the trust associated with incumbent financial institutions. Regulators matter to this plan; the group is pursuing authorization in the Netherlands to operate under the EU’s digital asset rules, a necessary credential to issue electronic-money-backed tokens under the new regime. If successful, the token would allow firms and consumers to transact in euros on-chain without routing through traditional payment rails or relying on foreign corporate intermediaries. The timeline is explicit: the consortium expects to bring the token to market in the second half of 2026, which sets a clear regulatory and engineering deadline. That schedule will force the initiative to resolve open questions around liquidity provisioning, reserve management, on-chain governance and interoperability with existing banking systems. Adoption will hinge on merchant and treasury demand, the costs and speed advantages over current rails, and whether European corporates prefer bank-backed stability to crypto-native alternatives. For regulators and policymakers, this effort reframes stablecoins as a domain where banks can reassert control over digital payments rather than cede ground to offshore issuers. The competitive implications are twofold: it creates a euro-based alternative to dollar-denominated tokens and it changes the bargaining position of non-bank stablecoin providers when European customers demand regulated options. Ultimately, the project will be measured by its ability to combine regulatory compliance with operational efficiency; failure on either front would limit uptake, while success could shape the architecture of euro-denominated digital payments for years.