By Marcel Thiess, CEO of Thiess Invest GmbH
On 8 May 2026, Christine Lagarde spoke at the Banco de España's Latin America economic forum and made an argument that put her at odds with much of Europe's banking sector. "The case for promoting euro-denominated stablecoins is far weaker than it appears," the President of the European Central Bank told her audience. Twelve days later, 25 more European banks joined Qivalis, the consortium building exactly that. With ING, UniCredit and BNP Paribas among its members, it now counts 37 banks in 15 countries.
So who is right? After almost a decade at crypto exchanges, market makers and custody providers across Europe, my answer is Lagarde. When I say nobody asked for euro stablecoins, I mean the people who are supposed to use them.
European users already had a stablecoin that worked.
For most of those years, European traders used USDT. It was the most liquid trading pair on almost every exchange; it moved between platforms in minutes, and it worked the same way in Berlin as in Buenos Aires. Users wanted lower fees, faster withdrawals, and more tokens, but I rarely heard anyone ask for a euro version of it. Then MiCA's stablecoin rules applied from 30 June 2024, and Tether did not apply for an EU license. By the end of March 2025, Coinbase, Kraken and Binance had removed USDT for their European customers. Users had to convert into a coin they had not chosen, or move their money to a platform outside the EU. The rest of the world kept using USDT, which has around $190 billion in circulation today.
I understand why authorities wanted to regulate an issuer serving millions of Europeans without an EU license or supervised reserves. However, for users, the result was a worse product, and the euro stablecoins that were supposed to take its place have not.
The biggest euro stablecoin is American.
Euro stablecoins today are worth less than €1 billion together. That is about 0.25% of a stablecoin market of roughly $300 billion, even though the euro makes up about a fifth of global currency reserves. Circle's EURC has done best. It has grown almost five times since the end of 2024 to about 397 million tokens, and it now holds around 60% of the euro stablecoin market. However, Circle is an American company, so the largest euro stablecoin is a US product. Much of its growth also came from exchanges that needed a compliant replacement for the coins MiCA forced them to delist.
Bank coins, by contrast, have done far worse. AllUnity, the euro stablecoin backed by Deutsche Bank's asset manager DWS, received its license from the German BaFin in July 2025. More than a year later, it has about €0.4 million in circulation.
The banks are building for sovereignty.
But why are 37 banks spending money on this, then? The answer is in their own statements. When Qivalis was announced in September 2025, the founding banks called it "a serious European alternative to the US-dominated stablecoin market." Two months earlier, the US had signed the GENIUS Act, and the White House said stablecoins would ensure "the continued global dominance of the U.S. dollar."
For Europe, this is a serious concern, because if payments and savings slowly move into dollar tokens, the ECB loses influence over its own monetary policy and European banks lose deposits. ECB Executive Board member Piero Cipollone put it plainly in February: "if we lose control of our money, we lose control of our economic destiny."
Nevertheless, users choose a stablecoin for liquidity, cost and reach, and on all three a euro stablecoin currently loses to the dollar coins it is supposed to replace. The banks seem to know this as well. On 1 September, 21 institutions including Santander, BBVA, Commerzbank and Deutsche Bank announced a joint stablecoin company. Its first product will be a dollar stablecoin in 2027, and the euro version comes later.
Lagarde was right.
That brings us back to Lagarde. Her point in May was that stablecoins "are not an efficient way" to strengthen the euro's international role. At home, the case is even weaker, because Europe already has the payment rails a euro stablecoin would offer. Since October 2025, every eurozone bank has to send instant euro transfers around the clock at the same price as a standard transfer, and Wero, the European payment wallet, already has 60 million users. If a German company wants to pay a Spanish supplier in euros instantly, it does not need a token for that.
A euro stablecoin can make sense for settling tokenized assets on public blockchains, because a tokenized bond or fund needs a cash leg on the same chain. Crédit Agricole's new EURXT, for example, was first used in July to subscribe to a tokenized Amundi money market fund. However, the ECB launched Pontes on 21 September to settle exactly these transactions in central bank money, so even the most promising use case now has a competitor from Frankfurt.
Europe successfully (?) removed the stablecoin users preferred, replaced it with euro alternatives that hold a fraction of one percent of the market, and justified the effort with monetary sovereignty rather than customer demand. Even the ECB doubts the benefit, and many of the banks behind the project are launching a dollar coin first. For euro stablecoins to succeed, issuers must offer users something USDT and SEPA Instant don't, whether that is deeper liquidity, lower costs, or a clear role in tokenized markets. A stablecoin succeeds only when users choose it, and so far European users haven't chosen a euro one.
Marcel Thiess is CEO of Thiess Invest GmbH. Thiess Invest GmbH is a founder-led holding company focused on building and investing in early-stage startups in Fintech, Digital Assets, AI, and emerging technologies.
