Payments

European banks embrace stablecoins

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September 26, 2025

Multiple banks across Europe are moving ahead with stablecoin offerings, despite some warnings from central banks.

In the EU, a consortium of nine banks, UniCredit, ING, Banca Sella, KBC, Dankse Bank, Dekabank, SEB, CaixaBank and Raiffeisen have announced plans to introduced a euro stablecoin in the second half of 2026, according to a report by CNBC.

Speaking to the benefits of stablecoins, Floris Lugt, digital assets lead at ING told the news outlet that stablecoins, "can settle 24/7, across the globe instantly, or near instantly. So that's a huge benefit for international payments. They are lower cost, and it's also transparent."

Currently the market is dominated by U.S. stablecoins, with a market capitalization of 99%. This euro-backed stablecoin could change the balance. The consortium of banks has formed a company in the Netherlands that will manage the stablecoin.

Multiple banks in the U.K. are also moving head with stablecoin investments, including HSBC, Natwest and Lloyds which introduced a pilot program for tokenized deposits, according to a report by Reuters. The Financial Conduct Authority has not finalized its stablecoin regulations and is not expected to until the end of 2026.

However, stablecoins have received some pushback from Bank of England Governor Andrew Bailey, who has said he believes stablecoins could both remove money from banks and threaten overall financial stability.

This mirrors a similar concern from banks in the U.S., which argued it could lead to deposit erosion.

"Stablecoins continue to risk disintermediating core bank activity like deposit taking and lending, which could undermine the fundamental role banks play in making loans to consumers and businesses," Rob Nichols, president and CEO of the American Bankers Association, said in a press release.

Crypto industry leaders have argued against this claim, as Faryad Shirzard, chief policy officer at Coinbase stated there is "no meaningful link between stablecoin adoption and deposit flight for community banks, and there's no reason to believe big banks would fare any worse."

Much of this current push for stablecoins stems from the Trump administration's embrace of the technology through the GENIUS Act. Signed in July with bipartisan support, this law put in place official regulations for the stablecoin industry maintaining that, "permitted issuers must maintain reserves backing the stablecoin on a one-to-one basis using U.S. currency or other similarly liquid assets, as specified. Permitted issuers must also publicly disclose their redemption policy and publish monthly the details of their reserves."

On the other hand, the bitcoin ATM industry is facing increasingly negative attention both from local municipalities and the Attorney General of Washington D.C., Brian L. Schwalb, who is suing Athena Bitcoin over allegedly profiting off elderly victims and failing to reveal its high fees.