The transformation of global finance is underway with the rise of stablecoins, primarily denominated in US dollars and the European project for a Digital Euro. These innovations raise major challenges for banks and public authorities on both sides
of the Atlantic.
This document aims to set out the framework and objectives:
- Understand what a stablecoin is, how it works (fiat-collateralized), and the market structure between USDC and USDT.
- Evaluate the Digital Euro (retail vs wholesale): benefits for the general public, impacts on banks, prerequisites, and the deployment timeline.
- Define your roadmap: Digital Euro strategy, the choice of settlement asset for tokenization, and your positioning on crypto-assets.
Access the full analysis and actionable steps in our white paper, which includes:
- What stablecoins and the Digital Euro are
- Market developments
- The strategic questions facing European banks
It is structured in three parts:
- Part 1 – Stablecoins
A particular form of crypto-asset
The three drivers fueling stablecoin growth - Part 2 – The Digital Euro, a project led by European public authorities
The retail Digital Euro
The wholesale Digital Euro - Part 3 – Recent developments and impacts for European banks
What is a stablecoin?
Understanding stablecoins: A stablecoin is a crypto-asset with a stable value, pegged to a reference asset (generally a fiat currency) and used as a settlement asset on a public blockchain. Issued by a private company in exchange for
fiat deposits, it is most often collateralized by reserves (e.g., Treasury bills), hence the expression fiat-collateralized stablecoins.
Rapid growth of stablecoins: Stablecoin value could reach USD 2 trillion by the end of 2028, with significant current usage in crypto-asset trading and, tomorrow, in cross-border payments and asset tokenization. Their daily volume exceeds
USD 150 billion, surpassing Visa and Mastercard combined.
How do stablecoins work?
Mechanics and US dominance: Stablecoins are crypto-assets backed by fiat currencies, mainly the US dollar, issued by two dominant companies, Tether and Circle, generating very high revenue.
What is the difference between USDC and USDT?
USDC vs USDT: The main differences start with their issuers and legal anchors: Circle (USDC) is based in the United States with an IPO planned for 2025, while Tether (USDT) is registered in the British Virgin Islands. As of August 2025,
their circulating supplies are approximately USD 63.9bn (USDC) and USD 165bn (USDT), respectively.
What are banks' opinions on cryptocurrency?
Evolving stance toward crypto-assets: Historically opposed to crypto-assets due to volatility and fraud, traditional banks are beginning to integrate these technologies. This movement is picking up faster in the United States, supported
by public authorities.
What is the point of a Digital Euro and when might it arrive?
The Digital Euro in Europe: Launched by the ECB, the Digital Euro aims to provide a public digital form of money, offer an alternative to private stablecoins, and reduce Europe's dependence on US players in electronic payments. There
is a retail project contested by European banks and a wholesale project, which they view more favorably. Studied since 2021, the Digital Euro could be decided in late 2025 with effective deployment from 2027–2028.
Retail Digital Euro: what's in it for the general public?
The retail Digital Euro would offer the public a digital form of public money, usable for everyday payments with a simple and secure experience. It includes offline payments for small amounts and a per-wallet cap. Distributed via banks, it targets broad
acceptance without disrupting existing habits.
Wholesale Digital Euro: what are the advantages for banks?
The wholesale Digital Euro would provide European banks with a public, blockchain-based settlement asset for interbank transactions, facilitating asset tokenization. Seen by banks as a better model than stablecoins for these use cases, it enjoys strong
support. To become a credible alternative, it must be compatible with public blockchains and be deployed rapidly by the ECB.
Three major questions for European banks
- What strategy should we adopt for the Digital Euro?
- Which settlement asset should we use for asset tokenization?
- What strategy should we adopt for crypto-assets?