98% OF STABLECOINS ARE IN DOLLARS. CAN 37 EUROPEAN BANKS DEFEND THE EURO?
di David Marini
At the end of May 2026, global stablecoin market capitalization was approximately $320 billion. In a separate 2026 analysis, the Bank for International Settlements estimated that approximately 98% of stablecoin value was dollar-denominated.
Europe is now developing an institutional response.Qivalis, the Amsterdam-based venture established by a European banking consortium, now brings together 37 financial institutions from 15 countries. Its members include BNP Paribas, ING, UniCredit, BBVA, CaixaBank, ABN AMRO, Intesa Sanpaolo, Rabobank and several other major European banks.
This contrast is significant:
- Approximately 98% of the market is denominated in dollars.
- Thirty-seven European financial institutions are preparing a regulated euro alternative.
However, institutional participation does not guarantee market adoption.
A $320 billion market – but still not a payment system
Stablecoins are digital tokens designed to maintain a stable value, normally by linking each token to a sovereign currency and holding reserve assets against it.
Stablecoins are often described as the next generation of payments, but the evidence suggests a more cautious view is warranted.
The BIS estimates that stablecoin transaction volume reached approximately $28 trillion in 2025. Yet much of this activity consisted of crypto trading, wallet transfers, and on-chain liquidity operations. Stablecoin use for payments in the real economy remained limited relative to conventional payment systems.
This distinction is critical: while stablecoins are functionally important within digital-asset markets, they have not replaced bank deposits, payment cards, or traditional wholesale settlement.
Their strategic importance lies elsewhere: they combine a currency denomination, a reserve portfolio and a distribution network within a single digital instrument.
That architecture can influence who controls payment rails, where liquidity is held and which assets are purchased as reserves.
The dollar advantage is structural
Dollar stablecoins do more than reproduce the dollar on a blockchain.
When an issuer receives dollars and invests part of the reserves in short-term US government securities, demand for a private digital dollar can be transmitted into demand for Treasury bills.
A BIS working paper using data through March 2026 found that a $3.5 billion inflow into dollar-backed stablecoins reduced three-month Treasury bill yields by an estimated 0.71 basis points on impact and by as much as four basis points within ten days. This is not evidence that stablecoins determine US borrowing costs. It does show that the connection is already measurable at the short end of the sovereign-debt market.
The United States has also made the currency dimension explicit.
The GENIUS Act, signed into law in July 2025, created a federal regulatory framework for payment stablecoins. It requires full reserve backing with eligible liquid assets and monthly disclosure of reserve composition. Its implementation is still under way, but the policy direction is clear: regulated dollar stablecoins are being treated as both payment infrastructure and a potential source of demand for US sovereign debt.
This represents digital monetary power, achieved without the Federal Reserve issuing a retail central bank digital currency.
Europe regulated first, but regulation did not create scale
The European Union moved earlier with the Markets in Crypto-Assets Regulation. MiCA’s provisions for asset-referenced and e-money tokens have been in effect since June 2024.
The framework established requirements for authorisation, reserves, redemption, governance, and disclosure. However, it did not result in a large euro-denominated stablecoin market.
On 20 February 2026, the three largest euro stablecoins had a combined market capitalisation of approximately €450 million, according to the ECB. That is not the entire euro-stablecoin market, but it illustrates the difference in scale.
The key lesson is that regulatory clarity is necessary but not sufficient.
A successful monetary network also requires liquidity, distribution, market makers, exchange listings, merchant acceptance, interoperability and credible use cases. The denomination chosen by users depends not only on regulation but also on the currency in which trade, savings, collateral and digital assets are already priced.
The dollar benefits from these network effects, which the euro does not automatically replicate on-chain.
What 37 institutions change -and what they do not
Qivalis materially changes the European response because the consortium brings together banks with large customer bases, established compliance systems and access to corporate, retail and institutional distribution.
The project intends to issue a euro-denominated stablecoin backed one-for-one and compliant with MiCA. Qivalis is pursuing authorisation from De Nederlandsche Bank as an electronic money institution and anticipates a market launch in the second half of 2026, subject to regulatory approval.
The consortium can potentially provide three things that smaller issuers struggle to build:
- distribution across several European markets;
- institutional confidence in redemption and compliance;
- integration with banking, treasury and payment services.
However, consortium membership does not equate to adoption.
Thirty-seven institutions can support a product without their customers using it. The decisive evidence will not be the number of consortium members. It will be outstanding issuance, transaction composition, redemption liquidity, exchange and wallet integration, corporate use and the ability to settle tokenised assets across different platforms.
Europe could have a strong issuer coalition yet still fail to establish a meaningful monetary network.
The deposit question
For banks, stablecoins are not simply another payment product. They can change the composition of funding.
If a household or company purchases stablecoins using funds from a bank account, retail deposits may be replaced by reserves held in deposits, government securities, or other eligible assets.
The money does not necessarily disappear from the banking system. In one scenario, granular retail deposits are replaced by a larger and more concentrated deposit from the stablecoin issuer. The total amount of deposits may initially remain unchanged, while their liquidity and funding characteristics deteriorate.
In another scenario, the issuer uses the funds to purchase government securities. The effect then extends from bank funding into sovereign-debt demand.
This is why reserve composition matters. A stablecoin backed predominantly by bank deposits produces a different balance-sheet effect from one backed predominantly by short-term public debt.
For private banks and corporate treasurers, the relevant questions are therefore not limited to price stability:
- Who is the legal issuer?
- What assets support redemption?
- Where are the reserves held?
- Can liquidity be accessed around the clock?
- Which blockchain and wallet infrastructures are supported?
- How are sanctions, AML and transaction-monitoring obligations enforced?
- Can the token settle securities, collateral or cross-border commercial payments?
These are fundamentally treasury and counterparty considerations, not just crypto-related issues.
Three architectures are competing
Europe is developing three distinct forms of digital money, which should not be considered perfect substitutes.
- A bank-backed euro stablecoin
A MiCA-regulated euro stablecoin could circulate across supported blockchain networks, operate around the clock and connect euro liquidity with tokenised markets.
Its potential advantage is reach. Its weakness is that regulation and banking sponsorship do not guarantee liquidity or acceptance. Its credibility will also depend on reserve composition, redemption arrangements, technical resilience and interoperability.
2.Tokenised commercial-bank deposits
A tokenised deposit remains a liability of the issuing commercial bank. It can preserve the existing two-tier monetary system while adding programmability and on-chain settlement.
This architecture may be particularly suitable for wholesale transactions, corporate treasury and tokenised securities. However, deposits issued by different banks require interoperability and a reliable central-bank settlement layer if they are to circulate at par across institutions.
The BIS’s Project Agorá has already demonstrated a prototype combining tokenised commercial-bank deposits with tokenised central-bank reserves. In July 2026, Project Agorá’s real-value testing involved 28 financial institutions and central banks, transactions totalling approximately CHF800,000, and 17 transaction scenarios. While this does not yet constitute a fully operational market infrastructure, the project has moved beyond the purely theoretical stage. - The digital euro
A digital euro would be a direct liability of the central bank and could preserve access to public money in an increasingly digital payment environment.
The ECB has selected 36 payment service providers for a 12-month pilot expected to begin in the second half of 2027. A possible first issuance is targeted for 2029, assuming that the necessary European legislation is adopted. The final decision to issue has not yet been taken.
The digital euro could serve as a public monetary anchor, but it is primarily intended as a retail payment instrument. It does not address all wholesale, cross-border, or tokenised-market use cases covered by stablecoins and tokenised deposits.
Europe may need all three – but not three disconnected systems
Europe’s most effective approach may not require a single instrument to replace the others.
A digital euro could preserve the role of public money. Tokenised deposits could support banking and wholesale settlement. A regulated euro stablecoin could connect European liquidity with open digital networks and cross-border use cases.
The main strategic risk is fragmentation: separate bank tokens, ledgers, incompatible wallets, and payment instruments that cannot be converted at par efficiently or seamlessly.
Europe’s challenge is not merely to issue another digital asset, but to ensure that public and private forms of euro money remain interoperable, scalable, and legally redeemable.
The United States already has the dominant currency, the largest stablecoin networks and a regulatory strategy designed to reinforce both.
Europe has regulation, a central bank initiative, and a 37-member banking consortium. However, it still lacks demonstrated demand at scale.
That is the number that does not add up.
David Marini – Senior Business Development Manager | Geoeconomics & International Finance | Author of “Il numero che non torna”
Methodological note: This analysis is based exclusively on public and institutional sources available as of 3 August 2026. Qivalis’ anticipated market launch remains subject to regulatory authorization. The article distinguishes observed market data from scenarios concerning deposits, sovereign debt demand, and monetary sovereignty. It is provided solely for analytical and informational purposes and does not constitute investment, legal or financial advice.
Documentary sources: Bank for International Settlements, Annual Economic Report 2026, Chapter III; BIS Papers No. 170; BIS Working Papers No. 1270; Qivalis, press release of 20 May 2026; European Central Bank, Macroprudential Bulletin, April 2026; BIS Project Agorá; ECB Digital Euro Pilot; Regulation (EU) 2023/1114 on Markets in Crypto-Assets; White House, GENIUS Act Fact Sheet, 18 July 2025.
