37 Banks Build Blockchain Payment Alternative to Euro Stablecoins: What’s Next?

<a href="https://tech-oracle.com/eur-usd/">Euro</a> Stablecoins: Why 37 Banks Are Building a Blockchain Payment Alternative

My finance team needs to pay a supplier invoice in euros by 5 p.m. today, and we’re looking at on-chain settlement options. A euro stablecoin appears to be the quickest route. However, our bank is encouraging us to try a new blockchain payment system they’re testing with other banks, which is giving us a bit of a dilemma.

Europe’s payment systems are changing due to a rivalry between independent stablecoins and digital money created by banks. Now that new EU regulations for stablecoins are in effect and a digital euro is being developed, banks are working to offer online euro-based services without letting non-bank companies take the lead.

As a researcher following developments in digital finance, I’ve been tracking a significant project emerging across Europe. It appears around 37 banks are collaborating on a new blockchain-based payment system. I’m investigating the motivations behind this initiative, what the system might look like in practice, and how it stacks up against the euro-backed stablecoins currently available.

The Big Picture

Euro payments are evolving to become faster and more flexible. Businesses, financial technology companies, and financial managers are looking for immediate transactions, reduced costs, and streamlined processes that connect easily with their financial and supply chain tools. While stablecoins currently offer these benefits on open networks, banks need to provide comparable speed and flexibility – but within the existing banking system, with built-in security measures and access to central bank settlements.

The debate between stablecoins and traditional banks isn’t just about competition – it’s a push to create a digital euro system that remains trustworthy, secure, and continues to support lending in the real world.

Several key developments are happening at once: the MiCA regulation is establishing clear guidelines for stablecoins, the European Central Bank is moving forward with plans for a digital euro, and Europe is prioritizing faster payment processing. These changes mean a blockchain network built by multiple banks isn’t just about new technology—it’s about fundamental questions like who will issue digital money, how to manage payment risks, and how Europe can maintain control over its payment systems.

What counts as a euro stablecoin in Europe?

The EU’s new crypto regulation, MiCA, defines “e-money tokens” (EMTs) as digital tokens linked to a specific traditional currency, like the euro or dollar. These function like online cash and can be redeemed by the issuer at their face value. Only banks and authorized e-money institutions are allowed to create EMTs. Another type of token, “asset-referenced tokens” (ARTs), are linked to a variety of assets. These have different rules and aren’t intended for everyday purchases or large payments within the EU.

Regulatory anchors that matter

New rules for stablecoins under MiCA (Markets in Crypto-Assets) went into effect around mid-2024. National regulators and EU authorities will oversee these rules. For the latest requirements and deadlines for adapting to these changes, refer to the official MiCA text in the Official Journal of the EU and guidance from the European Banking Authority (EBA).

In Europe, stablecoins that follow the rules are usually designed as EMTs – meaning you can always exchange them one-for-one for euros, and their reserves are safely protected and openly reported. Other types of stablecoins, known as ARTs, face stricter regulations when used for payments.

Who issues euro stablecoins today?

Circle’s EURC stablecoin is set to comply with the EU’s MiCA regulations through its French operations. This follows Circle’s 2024 announcements that both USDC and EURC will adhere to EU rules. You can find more information on Circle’s website: circle.com.

Monerium creates and manages EURe, a digital form of money fully compliant with European regulations. It functions on several different blockchain networks. You can find more information about the company at monerium.com.

Tether’s EURt is available on multiple blockchains, but when used for payments within the European Union, it needs to follow the new MiCA regulations. As regulators increase oversight, how and where EURt can be used may change.

Société Générale–FORGE has introduced EUR CoinVertible (EURCV), a digital token valued in euros and designed for use by financial institutions and in capital markets. You can find more information at sgforge.com.

Although tokens issued by banks or regulated payment companies might appear the same on the blockchain, the legal rights associated with them are different. Most Euro stablecoins represent a claim against the funds held in reserve by the issuer, and aren’t considered bank deposits unless the issuer is a bank that specifically handles them as deposits according to the rules.

Inside the bank-built alternative: tokenized euros, not just stablecoins

When banks talk about blockchain-based payment systems, they generally aren’t referring to the open, decentralized stablecoins used in the world of DeFi. Instead, they’re creating systems where tokens represent regulated financial obligations – often digital versions of deposits – or assets fully backed by central bank money. Their goal is to achieve instant settlement, allow for automated processes, and ensure everything complies with existing regulations, all within a system that financial supervisors understand and approve of.

Tokenized deposits

Tokenized deposits are digital versions of customer money held within banks. They allow for instant, automated transfers around the clock and could make settling transactions between banks much faster and more efficient. These systems can be built in a few different ways – some use private, permissioned blockchains, while others connect those private networks to public blockchains through secure connections.

Shared settlement assets

Banks are investigating new ways to settle large transactions more efficiently. This includes exploring digital assets – some backed by central bank money – and testing wholesale versions of central bank digital currencies (CBDC). The goal is to lower the amount of funds banks need to hold during the day and to make it easier to finalize tokenized securities transactions safely, ensuring payment and delivery happen simultaneously.

Interoperability layers

Several international projects, including those by SWIFT and the BIS Innovation Hub, are exploring ways to connect different digital ledger systems. Banks are particularly interested in making digital euros compatible with tokenized financial markets and current payment networks.

A project involving 37 banks suggests the financial industry is united on how to oversee, technically build, and legally handle digital tokens. This agreement is essential to prevent a chaotic situation where many different, incompatible euro tokens exist – which would undermine the entire effort.

Why a 37‑bank scale matters

Payment networks succeed by becoming widely used. A strong network can effectively set standards for verifying identities, complying with ‘know your customer’ regulations, ensuring secure transactions, and providing tools for developers. This also makes it easier for businesses and platforms to connect, whether through accounting software integrations or online payment systems.

Network effects beyond hype

Because many banks are participating, financial professionals can anticipate a smooth and standardized setup process, consistent digital connections, and more straightforward legal guidance regarding digital money and automated agreements. Regulators will also benefit, as it’s simpler to oversee one comprehensive system than numerous individual trials.

How a consortium payment might flow

Your company’s bank converts part of your euro balance into a tokenized deposit or approved on-chain euro instrument within a permissioned environment.
The payment instruction references an invoice and triggers a smart contract with rules (escrow, milestones, or time locks).
Atomic settlement occurs when conditions are met: the supplier receives tokenized euros while title to goods or a service receipt is logged on-chain.
The recipient can redeem to a bank account, keep the tokens for onward payments, or pledge them in a financing workflow—subject to network rules.
Compliance, reporting, and reconciliation data are produced in real time, mapped to existing ISO 20022 messages.

Comparing on-chain euro payment models

Several options—like stablecoins, tokenized deposits, and wholesale settlement assets—allow for euro transactions on blockchain networks. However, each has its own unique benefits, drawbacks, and level of accessibility. Here’s a comparison to help you select the best solution for your needs.

Here’s a breakdown of different types of digital assets, outlining their key features:

Euro Stablecoin (EMT): Issued by either an e-money institution or a bank, these are claims on funds held safely by the issuer. They’re designed for everyday retail and merchant payments, and can also integrate with decentralized finance (DeFi). They offer high programmability on public blockchains, with broad access depending on the platform. They are regulated by MiCA (for EMTs), e-money rules, and anti-money laundering (AML) laws.

Tokenized Deposit: These are bank deposits represented on a blockchain. They facilitate retail and wholesale transactions within a network of banks and offer high programmability within permissioned or connected systems. Access is limited to customers of participating banks and is governed by banking law, AML regulations, and prudential oversight.

Wholesale Settlement Asset: These assets are backed by central bank money or reserves, and are used for institutional transactions (DvP/PvP). They are highly programmable for institutional workflows and are accessible to financial institutions. Oversight comes from payment system regulations and potentially, frameworks for central bank digital currencies (CBDCs).

Digital Euro (Retail CBDC) – Proposed: This is a proposed retail version of a central bank digital currency issued by the Eurosystem. It would represent a direct claim on the central bank and be used for everyday retail payments, subject to certain limits. Programmability would be offered through intermediaries, and access would be public through those same intermediaries. It will be governed by a new legal framework currently being developed by the Eurosystem.

Where things stand between 2024 and 2026

Europe is juggling several complex financial initiatives simultaneously, including regulating stablecoins, developing policies for instant payments, and designing a central bank digital currency (CBDC), all while banks are actively exploring and implementing tokenization technologies. Key deadlines and goals are helping to manage expectations for these projects.

MiCA supervision of euro-referenced tokens

The rules for emission-allowed tokens (EMTs) and asset-referenced tokens (ARTs) under MiCA (Markets in Crypto-Assets) began in 2024. Companies selling stablecoins in the EU now need to get authorization and follow rules about protecting reserves, being transparent about their operations, and how they are governed. The European Banking Authority (EBA) has released explanations and is seeking feedback to clarify what’s expected from companies; you can find official details at eba.europa.eu and the official EU law websites.

Instant payments as the new floor

New rules from the EU, put in place in 2024, are making euro transfers available around the clock—24 hours a day, 7 days a week—at the same cost as domestic transfers. This is quickly making instant and automated payments standard practice. Banks are developing blockchain technology to work alongside existing services like SEPA Instant and TARGET, offering faster and more secure settlements.

Digital euro: preparation, not production (yet)

The European Central Bank is exploring the possibility of a digital euro, currently conducting tests and working with financial institutions on its design and privacy features. You can find details and projected timelines on their website, ecb.europa.eu. If a digital euro is introduced, it’s expected to work alongside existing bank accounts and digital payment methods. Banks will also require advanced, blockchain-based deposit options to support widespread business applications.

Tokenized capital markets pull payments along

With the increasing use of euro-based investments being managed directly on blockchains, payment systems need to evolve. Banks are testing a new approach called DvP, using digital versions of money, to minimize transaction errors, unlock collateral more quickly, and simplify processes like dividend payouts. This technology could eventually expand to include everyday business payments and larger company financial operations.

What this could unlock for merchants and treasurers

Besides being faster, programmable euros allow for automated rules – like releasing funds when a delivery is confirmed, offering discounts for early payment, and ensuring regulatory compliance. This becomes particularly valuable for businesses when it simplifies cash flow or minimizes losses from disagreements.

For merchants

– Faster settlement with instant availability can improve cash conversion cycles.

Rules for handling payments – like how long customers have to get refunds, options for dealing with disputed charges, and how to activate loyalty rewards – can be directly managed within the core transaction system.

– Cross-border acceptance improves when banks coordinate on KYC and settlement guarantees.

For corporate treasurers

– A single set of APIs for on-chain euros across many banks reduces integration overhead.

– Real-time, on-ledger reconciliation collapses month-end processes.

– Liquidity savings via atomic DvP/PvP could lower intraday credit lines and associated costs.

Risks & What Could Go Wrong

Fragmentation: Multiple euro tokens and rails may not interoperate, splitting liquidity and developer mindshare.
Smart contract and integration risk: Bugs in ledger code, wallets, or bank adapters could halt payments or expose funds.
Governance drift: A large consortium can move slowly; misaligned incentives may stall upgrades or cross-chain connectivity.
Regulatory friction: Divergent national interpretations of MiCA or data-protection rules could limit cross-border operation.
AML/privacy trade-offs: Fine-grained traceability may clash with customers’ privacy expectations; over-collection raises compliance risk.
Operational resilience: 24/7 rails need robust failover, key management, and incident response across all member banks.
Depeg/redemption risk for stablecoins: For EMTs, issuer failures or reserve mishandling can impair par redemption; banks may face run dynamics if tokenized deposits are too portable without safeguards.
Bridge risk: If public–permissioned bridges are used, compromised bridges can lead to loss events or frozen assets.

While blockchain payments offer potential benefits, they aren’t without risk. Instead of dealing with chargebacks like traditional card payments, you’re relying on the security of the code, the reliability of the system, and clear rules for how it’s managed.

Stay updated on the latest developments in European stablecoins, tokenized deposits, and central bank digital currency (CBDC) trials with Crypto Daily, which provides coverage of policy changes and market innovations: cryptodaily.co.uk.

Frequently Asked Questions

Is a euro stablecoin the same as a tokenized bank deposit?

A euro stablecoin built as an Electronic Money Token (EMT) represents a claim against money held securely by the issuer – either an Electronic Money Institution or a bank. A tokenized deposit, on the other hand, is a digital record of a traditional bank deposit, and is protected by existing banking laws. While they might appear similar when viewed on a blockchain, they differ in terms of legal rights, how they’re regulated, and access to settlement through a central bank.

Can EU residents still use euro stablecoins under MiCA?

We support stablecoins that follow all relevant EU rules, like MiCA and anti-money laundering laws. Some tokens might not be available in certain areas if they don’t meet these requirements. Please check the token issuer’s information and our platform’s terms for details.

How do fees and speed compare with cards and SEPA?

Stablecoins on blockchains can be quick and inexpensive, but transaction speeds and costs can increase when the network is busy or when transferring funds between blockchains. Systems built by traditional banks strive for immediate transactions with clear, pre-agreed fees built into existing banking agreements. The actual cost will vary depending on your bank, how the system is set up, and how much you transact – so don’t expect consistently very low fees.

What’s the difference between wholesale CBDC and these bank tokens?

Wholesale CBDC would be a digital form of central bank money used specifically for large-scale transactions between banks and in financial markets. Bank tokens, on the other hand, represent money created by commercial banks or groups of banks. Both systems aim for instant and final settlements, but they differ in who is responsible for the money, how they are governed, and who has access to them.

When might merchants see this at checkout?

The rollout will happen at different speeds depending on the country and the groups involved. Some initial programs already allow businesses to send payments directly to each other and pay users through digital wallets. Widespread use for everyday shoppers will come after banks establish clear rules, tools for businesses, ways to handle disagreements, and get the necessary legal approvals. It’s realistic to expect this to unfold in stages over the next one to two years, rather than in just a few weeks.

Will these bank rails connect to DeFi?

Some designs allow banks to connect to public blockchains in a controlled way, letting them use smart contracts that follow the rules. Other systems might stay completely separate. Regardless, expect strong identity checks, approved user lists, and monitoring of all transactions. It’s unlikely bank-issued digital money will offer the same open and anonymous access as current DeFi platforms.

How should a treasury team evaluate issuer risk?

Before using any digital euro-based instrument, find out who issued it, what it represents (like a payment token or deposit), and how its value is protected. Also, understand how you can redeem it, what happens if there’s a system failure, how often it’s audited, and if it has backing from a central bank. Make sure all of these details align with your company’s risk rules and legal requirements before you start using it.

2026-05-23 12:30