The European banking sector just dropped a bombshell—ten banks led by BNP Paribas announced plans to launch a euro stablecoin in the second half of 2026. This is pretty interesting, as it’s clear that Europeans aren’t happy with the dollar stablecoins dominating the market and want to develop something of their own.

The project will be executed by Qivalis, which is authorized by the Dutch central bank and will follow the MiCA compliance route. It all sounds pretty official, but here’s the issue—euro-denominated stablecoins currently account for less than 1% of the global market. To be honest, that’s a bit embarrassing, and it won’t be easy to compete with giants like USDT and USDC.

The president of the Dutch central bank seems pretty clear-eyed about this, directly warning that the expansion of the stablecoin market could interfere with monetary policy. That’s a valid point—stablecoins are essentially quasi-currencies, and once they reach a certain scale, it becomes tricky for central banks to control liquidity. An adviser to the European Central Bank also chimed in, suggesting that the current market size just isn’t significant yet.

Across the Atlantic, the US isn’t sitting idle either. Trump signed the GENIUS Act, which specifically creates a framework for payment stablecoins. This move is actually quite clear—the US has realized that stablecoins need to be under their control and can’t be allowed to grow unchecked in the private sector.

Tether’s experience drives the point home. After the new MiCA regulations were announced, they immediately halted redemptions for their euro stablecoin EURt. See? As soon as regulators step in, issuers have to adjust their approach—that’s the reality.

The current situation is actually quite delicate: Europe wants to form a banking alliance and play by the rules, the US is staking its claim through legislation, while dollar stablecoins still have a huge first-mover advantage in the market. Whether euro stablecoins can break through really depends on two things—first, whether they can build up local application scenarios in Europe, and second, whether they can maintain enough flexibility within a compliance framework.

At the end of the day, the battle over stablecoins is just beginning. All the players are testing the boundaries, and regulators are searching for the right balance. They need to prevent systemic risks, but also not stifle innovation at birth—that’s a tough balance to strike.