European lenders back Qivalis as race for digital euro alternatives grows

European banks are accelerating efforts to build a regional alternative to US-dominated digital payment systems, with 25 additional lenders joining a consortium preparing to launch a euro-pegged cryptocurrency later this year.

The consortium, which established an Amsterdam-based company named Qivalis last year, said on Wednesday that its membership has expanded to 37 financial institutions from 15 countries.

The group already included major European banks such as ING, BNP Paribas, and BBVA.

Newly added members include Dutch lenders ABN Amro and Rabobank, Spanish banks Sabadell and Bankinter, Bank of Ireland, Sweden’s Handelsbanken, and Finland’s Nordea, among others.

The move comes as European financial institutions explore ways to strengthen the euro’s role in digital finance while responding to the growing influence of US-based payment and cryptocurrency firms.

European banks push blockchain-based payment infrastructure

The consortium has positioned the initiative as a European response to the dominance of US companies in digital payments and stablecoins.

Qivalis CEO Jan-Oliver Sell said the project is intended to ensure Europe maintains control over financial infrastructure built on blockchain technology.

“The euro is Europe's currency, and on-chain financial infrastructure should carry it - built by European institutions and governed by European rules,” Sell said in a statement.

The project is also tied to expectations that financial assets such as bonds and real estate could eventually be traded as blockchain-based crypto tokens.

However, the European Central Bank has expressed scepticism about the broader benefits of such systems.

Reports earlier in May had indicated that several banks were expected to join the consortium.

Traditional lenders face growing pressure from the crypto sector

The crypto industry has increasingly moved into areas traditionally dominated by banks and mainstream financial institutions.

That shift has pushed lenders to look for practical applications of blockchain technology within their own operations.

Stablecoins, which are cryptocurrencies pegged to traditional fiat currencies, have grown rapidly in recent years.

They are primarily used within crypto trading markets but are increasingly being discussed as part of future payment and settlement systems.

The market remains heavily dominated by dollar-backed stablecoins.

El Salvador-based Tether said it has around $190 billion worth of dollar-pegged tokens in circulation, while US-based Circle reported approximately $77 billion.

The rapid expansion of dollar-linked stablecoins has intensified concerns within Europe about the euro’s limited presence in the digital asset ecosystem.

Demand for euro-pegged stablecoins remains limited

Despite growing institutional interest, euro-pegged stablecoins remain significantly smaller than their US dollar counterparts.

Societe Generale’s crypto division, SG-FORGE, launched a euro-backed stablecoin in 2023.

However, the token currently has only 105.6 million euros ($122.40 million) in circulation.

SG-FORGE is not part of the Qivalis consortium.

The relatively limited adoption of euro-based stablecoins highlights the challenge facing European financial institutions as they attempt to build a competitive digital payments ecosystem around the euro.

Still, the expanding membership of Qivalis signals that European banks are increasingly willing to collaborate on blockchain-based financial infrastructure as competition from the crypto sector intensifies.