European Banking Consortium Targets 2026 Euro Stablecoin Launch

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Introduction

Welcome to the Tokenized newsletter, brought to you by the creators of the Tokenized Podcast Simon Taylor of Fintech Brainfood, Pet Berisha of Sporting Crypto, and Shwetabh Sameer of Molten Ventures.

We are the newsletter for institutions that need help preparing for a Tokenized future.

We run through the headlines every week, what it means for you and a market readout. Always with an institutional, business-focused perspective. 

Join us every week as we meet your Tokenization needs.

Simon’s Market Readout 💬 

What's increasingly fascinating to me is how many revenue opportunities are opening up for financial institutions right now. And I mean real, measurable opportunities. Not theoretical blockchain use cases we've been talking about for years.

Look at what's happening with interbank settlement. European banks just announced they're using linking tokens for instant 24/7 settlement. Visa's doing the exact same thing with stablecoins. This is the simple and obvious stuff: you don't have to park collateral at other banks for days and weeks waiting for things to settle. You reduce credit risk. You reduce settlement risk. It's all about centralizing and simplifying the collateral asset.

This idea has been around for a long time. What's fascinating is it's now actually getting traction with large financial institutions and payments companies and everybody else in the middle. So long may that continue.

But once you've got that settlement asset, you can do lots of other interesting things with it. You can start to earn yield. Maybe you can lend against it. The sheer number of business cases available to financial institutions and non-banks from stablecoins is really, really fascinating.

I saw that Societe Generale through SG Forge just announced they're going to partner with Morpho to offer DeFi lending capabilities. They're making their stablecoin available on DeFi markets. That, to me, is genuinely fascinating and a real breakthrough moment.

Think about all the other products banks could build here. The quiet part out loud is that banks might worry about deposit flight or inviting in new competitors for lending. But the reality is banks are already some of the biggest lenders into private credit. They're already some of the biggest providers of deposit sweeping. We're already in a stage where banks are benefiting from the move toward more aggregated, more decentralized balance sheets. All they need to do now is turn that tap on, get involved, and capture new revenue opportunities.

It's fascinating times.

Stories You Can't Miss 📰

🏛️ European Banking Consortium Launches Euro Stablecoin to Challenge USD Dominance

Nine major European banks announced Thursday they're forming a consortium to launch a euro-denominated stablecoin by H2 2026. It’s one of the most coordinated bank-led efforts we’ve seen to expand euro liquidity onchain.

Key Points:

• Institutional firepower: ING-led consortium includes UniCredit, CaixaBank, Danske Bank, DekaBank, SEB, Raiffeisen Bank International, KBC, and Banca Sella. These represent over €3 trillion in combined assets across multiple European jurisdictions

• Strategic timing: Launch targeted for H2 2026, giving the consortium a three-year head start before the plausible launch of European Central Bank's digital euro in 2029 (if legislation is in place)

• Regulatory pathway: Amsterdam-based entity pursuing DNB e-money authorization under MiCA framework; licensing approval pending

• The capital efficiency play: If member banks accept the stablecoin as instantly-settled collateral across operations, we can expect significant reductions in prefunding (idle nostro account balances) while accelerating intraday liquidity management

• Distribution remains the wildcard: Individual banks will decide deployment strategies (wholesale-only pilots vs full retail/SME/corporate rollout) which determines whether this achieves meaningful scale or remains experimental

• Third-party integration critical: Payment service providers like Stripe, Adyen, and Worldpay must integrate for merchant acceptance; without broad PSP adoption, the consortium lacks the distribution to challenge dollar stablecoin dominance

The Tokenized Take:

The capital efficiency thesis makes strategic sense, but execution dependencies create substantial risk. MiCAR's e-money framework allows banks to issue stablecoins using existing balance sheet infrastructure and capital structures - a significant advantage over non-bank issuers building compliance from scratch. If these nine banks treat each other's euro stablecoin as instantly-settled, digitally-native collateral, they unlock material operational improvements: correspondent banking chains collapse to direct settlement, pre-funded nostro accounts shrink dramatically, and the same collateral can secure multiple operations with programmable reallocation with 24/7 operations. For cross-border euro payments, which currently requires 2-3 intermediaries, T+1 settlement, and 50-200 basis points in fees, this represents huge infrastructure improvement.

However, consortium governance tends to be slow and bureaucratic. The announcement carefully avoids committing to retail distribution, specific blockchain infrastructure, or interoperability standards. Without clarity on whether this runs on public, permissioned chains, or proprietary infrastructure, integration planning becomes impossible. More critically, the collateral efficiency advantage only materializes if EU regulators treat instant-settlement stablecoin assets differently than traditional euro deposits under Basel capital requirements. If the capital treatment is identical, the efficiency gains evaporate and this becomes merely a faster payment rail, not a treasury transformation.

The narrow execution window compounds the challenge. Existing euro stablecoins total less than ~$500 million in circulation compared to ~ $290-300 billion in USD stablecoins, demonstrating both the opportunity and the network effect deficit. Circle and Tether won’t be standing still. Circle already has MiCA compliant EURC and USDC, and both will be expanding European operations under MiCAR while this consortium navigates DNB licensing, builds technical infrastructure, and resolves governance across nine institutions. The question becomes whether coordinated institutional action moves fast enough to establish market position before either non-bank issuers capture European flows or the ECB's digital euro launch creates central bank competition.

We will also need integrations with Payment service providers like Stripe, Adyen, and Worldpay for merchant acceptance. Without broad PSP adoption, the consortium will lack the distribution to challenge dollar stablecoin dominance.

So the question becomes: Will these banks commit resources to aggressive rollout, or will this become another high-value wholesale pilot that never reaches the corporate treasurers and SMEs who would drive meaningful volume?

The strategic vision is sound: European banks controlling European digital euro infrastructure ahead of CBDC competition makes sense. But success requires DNB approval, member bank distribution commitments, PSP integration, favorable collateral treatment, and technical interoperability decisions that remain entirely unannounced. The gap between press release and operational reality will determine whether this reshapes European payments or becomes a footnote in the stablecoin infrastructure wars.

🚀 SWIFT Tests Blockchain Settlement Prototype: Progress, But We're Still Early

The global financial messaging network connecting 11,000+ institutions has announced a conceptual prototype for blockchain-based settlement with Consensys, marking positive intent but highlighting how much infrastructure and compliance work remains after a decade of industry experimentation.

Key Points:

• Conceptual prototype phase: SWIFT collaborating with Consensys and 30+ financial institutions across 16 countries on shared-ledger testing that has recorded, sequenced, and validated transactions in development stages

• Major bank participation: BNP Paribas, BNY Mellon among participants, showing institutional interest. But commitment to production deployment is yet to be seen

• Technical exploration: Prototype envisions real-time transaction logging with smart contract rule enforcement; reports suggest potential piloting on Consensys infrastructure, though specific blockchain selection unconfirmed

• Support for regulated tokenized value: Design prioritizes interoperability with CBDCs, tokenized assets, and commercial bank money; reports mention exploring potential settlement token capabilities but no confirmed token launch plans

• 24/7 settlement aspiration: Current testing aims to enable always-on cross-border settlement, addressing business-hours limitations of existing correspondent banking

The Tokenized Take:

This is a positive signal, but infrastructure gaps persist. SWIFT's blockchain prototype represents meaningful institutional validation - the world's largest financial messaging network acknowledging that distributed ledger technology offers superior settlement architecture. However, after a decade of blockchain experimentation in financial services, we're still discussing conceptual prototypes rather than production systems. This highlights the persistent infrastructure and compliance challenges that prevent traditional finance from fully embracing blockchain settlement, despite clear operational advantages.

Traditional pace meets urgent market evolution. While SWIFT methodically tests blockchain concepts, trillions in transfer volumes are already flowing through DeFi protocols, stablecoin networks, and tokenized payment systems operating 24/7.

The prototype approach (involving 30+ institutions in extended testing phases) reflects traditional finance's deliberate consensus-building culture. Yet market dynamics demand accelerated adoption timelines as digital-native alternatives capture increasing payment flows and younger institutions bypass correspondent banking entirely.

Builder-TradFi collaboration becomes critical acceleration factor. The step function change in adoption pace will likely emerge from partnerships that combine deep blockchain technical expertise with traditional banking operational knowledge, exactly what the SWIFT-Consensys collaboration represents. The question becomes whether established institutions can move beyond prototype phases quickly enough to remain relevant, or if the measured approach allows crypto-native infrastructure to establish irreversible network effects. Success requires bridging builder innovation speed with institutional risk management - a cultural and operational challenge as significant as the technical implementation.

🏛️ Visa Pilots Stablecoin Pre-Funding: The Treasury Infrastructure Shift Everyone Will Miss

Visa announced at SIBOS 2025 a stablecoin pre-funding pilot through Visa Direct that fundamentally redesigns treasury management for cross-border payments. The pilot will allow banks, remittance firms, and financial institutions to pre-fund accounts with USDC and EURC instead of maintaining fiat balances across dozens of currencies.

Key Points:

• Capital efficiency breakthrough: Instead of locking $50M+ across 30+ currency accounts, institutions can hold a single stablecoin treasury position and deploy it globally in real-time

• Visa treats stablecoins as "money in the bank": Pre-funded regulated stablecoins (e.g., USDC/EURC) balances are counted as available funds for instant payouts. This will eliminate traditional correspondent banking delays

• Recipients receive local fiat currency: The end-user experience remains unchanged. So, someone in London still receives £500 to their card, but the settlement infrastructure runs onchain

• Limited availability April 2026: Visa is working with select partners meeting pilot criteria, with broader expansion planned throughout 2026

• Proven track record: Visa has already settled $200-225 million+ in stablecoin volume across its network since piloting USDC settlement in 2023

The Tokenized Take:

This is treasury infrastructure being rebuilt in real-time. The headlines will focus on "Visa using crypto," but the strategic move here is far more surgical. Visa is solving a specific, expensive problem: the working capital inefficiency of pre-funding cross-border payments.

Right now, if you're a fintech running global payouts via Visa Direct, you need millions pre-funded across every currency you touch. Total capital locked up: tens of millions. Just sitting there. Earning nothing. Waiting for settlement windows that only operate during business hours in specific time zones.

Visa's stablecoin model collapses that infrastructure. Hold one USDC treasury position. When someone in Tokyo needs ¥50,000, your USDC balance drops by the dollar-equivalent amount. Visa Direct pushes yen to their card instantly. Visa settles with you in USDC. The recipient sees absolutely nothing different. It’s still local fiat, still their familiar card experience.

The capital efficiency implications are significant. Instead of managing liquidity across 30+ currency accounts with complex forecasting models, treasury teams can centralize capital in stablecoins and deploy globally on-demand. For non-G-SIB banks and regional financial institutions, this represents a structural competitive advantage - they can suddenly offer the same settlement speed as global money-center banks without the correspondent banking relationships or balance sheet scale.

Critically, Visa is building an alternative settlement layer that operates alongside traditional correspondent banking rather than requiring it. Traditional cross-border settlement relies on multiple intermediary banks, each adding days and fees. Stablecoin pre-funding creates a parallel path where settlement happens onchain while payout delivery uses existing Visa Direct infrastructure. This positions Visa as an infrastructure provider rather than just a network operator.

The $200-225 million settled to date proves operational viability. The April 2026 limited availability timeline suggests Visa has confidence in partner demand and regulatory pathways. The target audience - banks, remitters, and financial institutions handling high-volume cross-border flows - represents exactly where capital efficiency creates immediate ROI.

So the question becomes: If a regional bank can match the settlement speed and capital efficiency of global money-center institutions by adopting stablecoin treasury management, how quickly does this move from pilot to standard infrastructure?

Visa's approach validates a thesis we've tracked all year: treasury infrastructure is being rebuilt with stablecoins as the liquidity layer, while maintaining familiar fiat interfaces for end users. The institutions paying attention now will have first-mover advantage when this scales.

💸 Phantom Becomes a Neobank (Disguised as a Wallet)

Phantom just crossed the line from crypto wallet to full-fledged financial services platform. The company launched Phantom Cash with CASH, a dollar-pegged stablecoin issued via Stripe's new Open Issuance infrastructure, alongside instant bank funding, peer-to-peer payments, a Visa debit card, and yield on unspent balances.

Key Points:

• CASH stablecoin issued through Bridge/Stripe’s Open Issuance infrastructure. Stripe positions this as a way for brands to launch stablecoins with minimal code and shared liquidity across participating tokens.

• Reserves + Partners: Bridge says reserves allocations can involve BlackRock, Fidelity, and Superstate.

• Full neobank feature set: instant bank/card deposits, zero-fee crypto conversion, Apple Pay/Google Pay integration, physical and virtual Visa debit cards, and peer-to-peer transfers

• Planned Stripe merchant acceptance - CASH positioned for future integration across Stripe's global merchant network

• Rewards on unused CASH balances - turning idle stablecoin deposits into yield-generating accounts

• US-only early access with waitlist currently live

The Tokenized Take:

Wallets are the new everything apps. Phantom isn't building a crypto wallet with payment features - they're building a full financial infrastructure platform that happens to have crypto rails. Consider what they've assembled: deposit accounts (instant bank funding), payment cards (Visa integration), money transfers (P2P), yield products (rewards on balances), and planned merchant acceptance (Stripe network). That's the complete neobank stack, delivered through blockchain settlement.

The aggregation thesis is playing out in real time. Phantom recognized what legacy finance refuses to admit: consumers don't want separate apps for crypto holdings, fiat balances, payments, and yield. They want one interface that aggregates everything. Phantom Cash combines onchain assets with offchain services in a single pane of glass - your Solana NFTs sit alongside your dollar balance that generates yield and connects to a Visa card. This is the "super app" model that Western financial services has talked about for years but never executed.

Stripe's Open Issuance platforms the stablecoin wars. Rather than competing directly, Stripe built the infrastructure layer enabling any company to launch branded stablecoins with just "a few lines of code." CASH is the first, but Stripe announced mUSD for MetaMask and USDH for Hyperliquid launching on the same rails. The playbook mirrors AWS: instead of building applications, build the platform that lets everyone else build applications. This could fragment the stablecoin landscape significantly - or create seamless interoperability if Stripe's infrastructure delivers on that promise.

The institutional custody backing changes competitive dynamics. Previous wallet-issued stablecoins faced credibility questions around reserve management. But if they are able to route through Bridge with BlackRock, Fidelity, and Superstate handling reserves, Phantom will get institutional-grade trust architecture without building it themselves. This lowers the barrier for every major wallet to launch their own stablecoin - which explains why MetaMask and Hyperliquid are right behind them.

Fee-free stablecoin conversion matters for daily usage. Phantom's no-fee stablecoin trades eliminate friction that traditional exchanges extract. Combined with yield on idle balances, the unit economics look compelling for users managing digital dollar positions - instant liquidity, global reach, programmable infrastructure, and returns on deposits without the transaction tax.

Crypto wallets are evolving into platform-native banks. Phantom has 15+ million monthly active users, primarily on Solana. The strategic shift from custody tool to comprehensive financial platform represents a broader trend: wallets becoming the primary financial interface for digitally-native users. Traditional banks offer branch access and FDIC insurance; wallet-banks offer 24/7 settlement, programmable compliance, and global interoperability.

The strategic question for institutions: Will you partner with these emerging wallet-banks, compete against them, or watch them capture the next generation of financial services customers? Phantom just accelerated that competitive timeline.

📰 Some More News:

🏦 Tokenization, Stablecoins & Finance

• Crypto Wallet Phantom Unveils Stablecoin and Payments Service (Read more here)

• SocGen's Crypto Arm Deploys Euro, Dollar-Pegged Stablecoins in DeFi via Morpho and Uniswap (Read more here)

• Stripe to help companies launch their own stablecoins, reportedly applying for federal banking charter (Read more here)

• Stripe Bridge Unveils Stablecoin Platform – Can Any Business Now Mint Its Own Token? (Read more here)

• Stripe and Brex make stablecoin moves (Read more here)

• TradFi Giant Deutsche Börse Taps Circle for Major European Stablecoin Push (Read more here)

• Animoca Forecasts Crypto Giants Will Evolve Into Universal Exchanges with DeFi (Read more here)

🤑 Funding and M&A

• CoinRoutes Acquires QIS Risk for $5M  (Read more here)

• Ethereum Treasury Bit Digital Proposes $100M Convertible Note Offering  (Read more here)

• Phantom Wallet Raised $150M at $3B Valuation (Read more here)

💼 Government & Policy

• EU Moves Toward Shock Stablecoin Ban, Threatening Major Issuers Like Circle and Paxos (Read more here)

• EU watchdog pushes for stablecoin ban (Read more here)

• Solana ETF issuers gear up for SEC approval as soon as next week (Read more here)

• Government shutdown could delay new crypto ETF approval (Read more here)

Tweet of the Week 🐤 

From Patrick Collison

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