Euro-pegged stablecoin project Qivalis has reportedly picked up the support of 25 new banks.
That brings the total number of lenders backing the effort to 37, the Financial Times (FT) reported Wednesday (May 20).
As the report points out, this is happening as executives and policymakers grow increasingly worried about the implications of the dollar’s dominance of the cryptocurrency market.
Qivalis CEO Jan-Oliver Sell told the FT that “the European sovereignty angle” was important given a geopolitical situation that was making it “attractive for people to think about an alternative to the U.S. dollar.”
The venture launched late last year with the support of 10 European banks. The addition of these new banks, the FT said, makes Qivalis Europe’s largest stablecoin project.
Stablecoins are digital tokens usually pegged to fiat currencies, and have become more popular with banks seeking a way to speed up things like payments and settlements.
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As PYMNTS wrote in February, the various bank stablecoin projects share a common thread: a wish to “economize on the unglamorous but expensive” parts of financial infrastructure, such as messaging, clearing, settlement, reconciliation and compliance.
“Each layer adds cost, delay and operational risk. Stablecoins offer a way to collapse multiple functions into a single shared ledger,” that report added.
Banks in Europe, the FT report noted, have grown increasingly concerned about dollar dominance in the crypto space and the push by digital asset companies into their territory.
Christine Lagarde, president of the European Central Bank, said earlier this month that rising use of dollar stablecoins in Europe posed a “legitimate concern that risks entrenching dollar dependency,” while expressing some hesitancy about a euro stablecoin as well.
And French Finance Minister Roland Lescure last month called on European banks to develop more euro-based stablecoins to reduce the region’s reliance on non-EU payment providers.
There are $320 billion in stablecoins in circulation, most of them pegged to the dollar, with crypto companies Tether and Circle the two biggest issuers, the report added. Circle has a euro-pegged coin, but its market capitalization is $450 million, compared to $77 billion for the company’s dollar-pegged token.
Meanwhile, Sell said he was in talks with numerous non-European banks that do business in countries with significant remittances sent from Europe about joining the project.
“We’re not competing with payments in Europe because payments in Europe work,” he added. Rather, stablecoins would be used for activities like cross-border payments and immediate, or “atomic,” settlement, Sell said.