At the end of 2025, a group of ten European banks (Banca Sella, CaixaBank, Danske Bank, DekaBank, ING, KBC, Raiffeisen Bank International, SEB, UniCredit, and BNP Paribas) formed a consortium called Qivalis to launch a stablecoin pegged to the euro.
Throughout 2026, other banks—including the Italian institutions Intesa Sanpaolo and Bper Banca—joined the consortium, bringing the total to 37 banks across 15 European countries, demonstrating the interest the initiative has generated within the banking sector.
What is a stablecoin?
But what exactly is a stablecoin?
Essentially, it is a specific type of cryptocurrency—that is, a virtual currency which, according to the Bank of Italy’s definition, constitutes a digital representation of value and is used as a medium of exchange or held for investment purposes. The most well-known cryptocurrencies, such as Bitcoin, Ethereum, Cardano, etc., can in fact be used for various purposes, such as payments, decentralized finance transactions, or purchased purely for speculation.
Within the realm of cryptocurrencies, stablecoins are characterized by two specific features designed to overcome the extreme volatility of “classic” cryptocurrencies—one of their greatest weaknesses.
A stablecoin is, in fact, tied to a specific currency with a fixed reference (a so-called peg), for example, a coin xy = one dollar, and to ensure the validity of this reference for each unit of stablecoin, the issuing company holds securities for the same amount in the reference currency. For example, the aforementioned coin xy, which is pegged one-to-one to the dollar, will also be backed by the issuing company holding a dollar-denominated asset worth one dollar.
These characteristics allow stablecoins to serve as a means of payment outside traditional banking channels, much like cryptocurrencies, while ensuring the maintenance of their value; an aspect of great interest to populations with fragile currencies. It is no coincidence that stablecoin flows account for as much as 7.7% of GDP in Latin America and 6.7% in Africa and the Middle East.
Stablecoins in U.S. dollars
It should be emphasized that we are not talking about fantasy finance; the two main stablecoins, Tether and Circle, based in San Salvador and the U.S. respectively, have a combined value of approximately $300 billion and are now well-established and widely recognized entities; Moreover, the past has not been without surprises, as in the case of Circle, which saw its cryptocurrency trading at $0.87 instead of $1 because part of its reserves were held at Silicon Valley Bank, a bank that went into default in March 2023.
As can be seen, the references to fiat currency (the currency issued by central banks) mentioned above, to which the stablecoin is linked, pertain exclusively to the U.S. dollar. This is because virtually all stablecoins are pegged to the dollar, to the extent that it is estimated that this currency accounts for 98% of this market.
The U.S. administration strongly supports this type of cryptocurrency because it views stablecoins as a tool to ensure the dollar’s supremacy as the international reserve currency and as a means to expand the market for U.S. Treasury bond buyers—a highly significant consideration given the financial scale of U.S. stablecoins and the massive public debt burdening the U.S. In this sense, the recentGenius Act is a clear expression of the U.S. administration’s political will.
It is interesting to note that in the U.S., the Federal Reserve has been prohibited by the Anti-CBDC Surveillance State Act from creating a central bank digital currency (CBDC) pegged to the dollar.
Stablecoins in Europe
How does the Qivalis initiative for a European stablecoin fit into this picture?
Currently, Qivalis is awaiting authorization as an electronic money institution (EMI) under the supervision of the Dutch central bank (De Nederlandsche Bank—DNB), pursuant to Regulation (EU) 2023/1114 (MiCAR), which governs cryptocurrencies in Europe.
There are obviously issues to be clarified, among which the management of the reserves backing the stablecoin stands out (see the very recent paper by the think tank Bruegel, A new strategy to contain stablecoin risks in the European Union, authored by L. Reichlin, B. Sangers, and J. Zettelmeyer). In this regard, it should be noted that the market for securities issued by the Commission is in fact too small—approximately 750 billion euros to date—and is tied to specific issuances, making it inadequate for the purpose at hand. One could therefore envisage a basket of securities issued by various European states, the composition of which would, however, need to be predetermined; if a European stablecoin were to be created, this would generate a new buyer of government bonds and open up a very interesting avenue.
Given the dollar’s near-total dominance, one might think that the prospect of a stablecoin denominated in euros would generate enthusiasm; in reality, this does not seem to be the case.
The speech by Christine Lagarde, President of the European Central Bank, delivered on May 8 (Stablecoins and the future of money: separating functions from instruments), in fact expresses a strongly critical stance toward stablecoins.
In her speech, Lagarde, among other aspects, questions two functions of stablecoins.
Regarding the monetary function, she does not deny the potential advantages of stablecoins, the very same that have led the U.S. administration to vigorously support dollar-backed stablecoins, but she asserts that concerns about financial stability take precedence, as this stability could be compromised by a crisis of confidence in a stablecoin, as occurred in the case of Circle, and regarding the potential weakening of monetary policy transmission channels, given that the transfer of resources into stablecoins would reduce the role of banks and thus the impact of central bank actions on interest rates.
The second aspect concerns technology. Stablecoins are based on the same technology as cryptocurrencies (blockchain and distributed ledgers, DLT Distributed Ledger Technology), which offer considerable advantages.
Lagarde acknowledges the technological leap they represent and the virtual impossibility of avoiding it, but asserts that these advantages should be harnessed not through privately managed stablecoins, as is the case with Qivalis, but rather through a public European framework—specifically, the digital euro:
“When central bank money is available natively on-chain, and when tokenized deposits and MiCAR-compliant euro instruments can operate within the same interoperable environment, market participants will have no reason to rely on a foreign private substitute by default”
said Lagarde.
Some doubts
Reading the various public statements by members of the European Central Bank, and in particular Lagarde’s speech cited above, one gets the distinct sense of strong support for the digital euro, promoted as a necessary choice for safeguarding European sovereignty; support, however, that would seem to rule out any other alternative, in this case the proposal by a consortium of banks that can hardly be characterized as unsupervised and unprofessional financial intermediaries.
In the author’s view, a tug-of-war is emerging between two visions of future monetary management—a clash that has already materialized in the European approval process for the digital euro, with opposition from banks concerned about the loss of deposits and their role in payment services.
This is a topic that appears specialized but which, in reality, can impact everyday life.
The choice of the digital euro—that is, a digital currency issued by a central bank (CBDC)—would fulfill every central banker’s dream; it would indeed provide the ability to strictly control the circulation of money in a very short time, as it would, at that point, be nothing more than an accounting entry in an information system.
In the author’s view, this is the central aspect of the ECB’s assessment, while the other critical issues highlighted by Lagarde may have their own relevance but do not appear to be decisive in the choice; rather, they serve to justify the rejection of a stablecoin in euros.
Beyond the technical aspects, it must be emphasized that a currency managed in this way by the central bank raises a significant issue of personal freedom. In a world where cash will play a much smaller role, having access only to a public payment system risks compromising not only privacy but also the actual availability of one’s financial resources; nor do the general assurances issued by the European Central Bank seem convincing, especially in the event of a major financial crisis—which, as is well known, would be a shame to waste.
