Europe's on-chain euro problem is not a shortage of token designs. It is a shortage of settlement density. Banks moving payments, trade finance, treasury and tokenised assets onto blockchain rails need a euro cash leg that settles inside the same digital environment. Without one, euro-denominated activity risks falling back on the deepest available on-chain settlement network, which today means United States (US) dollar stablecoins. A tokenised asset achieves little when the cash leg still settles through legacy correspondent banking outside the same digital environment. Jan-Oliver Sell, chief executive officer of Qivalis, put the mechanics plainly: "If you start to build those use cases out, then you also need your local currency on-chain with liquidity." Without a euro token deep enough for that purpose, banks fall back on a familiar default. "Either you build your local currency on-chain or you end up using US dollars," he said. Qivalis is a Netherlands-incorporated company backed by 37 European banks, including ING, BBVA, BNP Paribas, ABN Amro and Rabobank. It plans to issue a regulated euro stablecoin under the European Union's (EU) Markets in Crypto-Assets (MiCA) regulation. Its relevance lies in the European race to create enough network density around a regulated euro settlement asset before US dollar stablecoins, central-bank-led models or alternative bank-led networks establish the dominant settlement rails. US dollar stablecoins already show what a dominant settlement network looks like once it forms. US dollar-pegged tokens now account for more than 99% of the roughly $300 billion global stablecoin market, and US legislation such as the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act has entrenched that dominance. Sell captured the imbalance in a single comparison: "The euro is clearly the second global currency, but on-chain, it's 0.2%, it's non-existent." He linked the gap to geopolitics rather than technology: "I don't see that the whole world wants to operate in US dollar terms," he said. The imbalance does not reflect a shortage of euro token designs. It reflects a shortage of euro settlement density, built up while US dollar tokens became the default wherever a transaction did not specifically require another currency. Europe's missing layer is commercial-bank settlement Europe’s emerging tokenised settlement architecture separates infrastructure, public money and commercial-bank money into distinct layers. At the opening plenary of Sibos Frankfurt 2025, Swift said it would add a blockchain-based shared ledger to its messaging infrastructure, positioning itself at what chief executive Javier Pérez-Tasso called the infrastructure layer of tokenised settlement. That ledger is now ready for initial use with 17 banks, enabling cross-border transfers of tokenised deposits that remain commercial-bank liabilities of their individual issuers. Deutsche Bundesbank president Joachim Nagel called the digital euro the most important project of the Eurosystem, while the European Central Bank’s digital euro work gives the public-money layer a broader institutional frame. Swift’s ledger and the digital euro define two parts of Europe’s settlement stack, but neither gives banks a single shared commercial euro cash leg for institutional tokenised markets. Institutional flows need more than interoperability infrastructure and a public-money instrument designed for broad acceptance. Banks moving payments, trade finance, treasury and capital-market activity onto blockchain rails need a settlement asset they can use inside their own compliance, liquidity and client-management systems. Qivalis seeks to occupy that layer with a regulated euro stablecoin and is applying to the Dutch central bank for an Electronic Money Institution licence that would allow it to issue a euro stablecoin regulated under MiCA. A compliant token, an issuer and a bank shareholder base create the conditions for adoption, but they do not create market infrastructure by themselves. Qivalis must prove that a shared regulated asset can gather enough recurring use to become Europe’s commercial-bank settlement layer. Europe’s architecture may leave commercial-bank money as the decisive open layer because liquidity will form only where banks and their clients repeatedly meet to settle. Network density, not token design, drives settlement power Financial market infrastructure derives value from network density rather than from the instrument it moves. Swift, Visa, CLS and correspondent banking became powerful because enough institutions, clients and use cases concentrated on the same networks. Liquidity then reinforced participation, and participation reinforced liquidity. Qivalis’ 37-bank structure matters more than its token label. A single issuer could create a regulated euro stablecoin, but it would struggle to persuade other banks to treat that token as neutral settlement infrastructure. Qivalis needs enough recurring institutional participation for the network itself to become its competitive advantage. That threshold separates market infrastructure from a niche product. Below it, Qivalis remains another regulated euro stablecoin competing for uptake in a market already shaped by US dollar liquidity. Above it, each additional bank, corporate treasury or trading counterparty could make the network more useful for everyone already connected. The strategic value shifts from the token's design to the density of the network around it. Qivalis becomes important only if it helps Europe solve the settlement-density problem. Different architectures are chasing the same density The tokenised settlement landscape now groups around five competing ways to create density. Partior, a Singapore-based bank-led shared ledger for cross-border settlement, concentrates activity on common infrastructure rather than on a single circulating token. Fnality, a United Kingdom payments utility, anchors settlement in central bank money to lower the trust barrier for institutions joining the network. Project Agora, led by the Bank for International Settlements, brings central banks and commercial banks into the same tokenised settlement framework. The Regulated Liability Network (RLN), a shared-ledger model designed to let central-bank money, commercial-bank deposits and other regulated liabilities transact while remaining on each issuing bank’s balance sheet, seeks to create interoperability without replacing those liabilities with a single common token. Finally, Project mBridge uses multiple central bank digital currencies to connect cross-border payment corridors. Each model gives institutions a different answer to the same problem: how settlement networks become useful enough for banks to join, fund and use repeatedly. Partior's density comes from the number of bank-to-bank connections running through its shared ledger rather than from the reach of one euro token. Fnality reduces adoption risk by tying its settlement asset to central bank money, although it still needs enough connected institutions to make that network useful in live payments. Project Agora uses central bank participation to carry some of the trust-building that a commercial project would otherwise need to create alone. Tokenised deposits preserve existing bank relationships but risk fragmentation across issuers, while Project mBridge tackles the problem at the central-bank level by connecting sovereign digital currencies rather than building commercial-bank density from scratch. Qivalis is the only model in this group building density around a single shared commercial-bank stablecoin. Sell drew the sharpest version of that distinction against tokenised deposits, the model closest in spirit to Qivalis but built on the opposite trade-off. "A stablecoin can be held by anyone, used by anyone, and can flow freely through the on-chain world, whereas a tokenised deposit is tied to the bank that issues it," he said. That openness gives Qivalis an advantage only if it can convert 37 shareholders into recurring settlement flow. The 37-bank question is really a usage question A single European bank could issue a regulated euro stablecoin tomorrow, but it might struggle to make that token useful beyond its own franchise. Its clients could transact with one another, while other institutions may have limited incentive to integrate a competitor’s proprietary settlement asset into their treasury, custody and compliance systems. In practice, that could leave the token looking more like a product built around one balance sheet than shared financial infrastructure. A more broadly usable model would likely require a euro-denominated settlement asset that banks and other market participants are willing and able to use across the wider network. Qivalis' shareholder base expanded from nine founding banks to 37 across 15 countries specifically to widen the pool of institutions and clients able to use the token without leaving their existing bank relationship. But shareholder participation does not automatically create transaction volume. Swift needs something close to universal correspondent coverage to support even the smallest cross-border payment. Qivalis is targeting a narrower base of large institutional trade finance, treasury and payment flows already concentrated among a relatively small number of major banks, where 37 banks may cover a meaningful share. Membership does not equal usage, and that gap will decide whether Qivalis becomes infrastructure or remains a regulated consortium. Once enough client transactions are routed through the token from the 37 banks, a new bank's decision to join would depend less on the token's design and more on who else already uses it. A rival euro stablecoin with comparable technology may then face a structural disadvantage because the connected network, not the code, would become the asset worth joining. Liquidity follows participation Banks piloting blockchain for cross-border payments, trade finance and treasury operations face the same constraint once a pilot moves towards production. Moving the asset side of a transaction onto digital rails does little if the cash leg still settles off-chain. "If you need access to, for example, EUR 30 million (approximately $34 million) on-chain, it is currently difficult to do that efficiently in the secondary market," Sell said. He estimated combined liquidity across the largest euro stablecoins at EUR 600 million (approximately $685 million) to EUR 800 million (approximately $913 million), small enough that a single large treasury transaction could absorb a meaningful share of it. Circle, the US payments company behind the USDC dollar stablecoin, already issues Euro Coin (EURC), though its circulation and secondary-market liquidity remain limited relative to dollar-denominated tokens. The business problem for European banks is not only payment speed, but dependence on a foreign-currency settlement asset for transactions that may originate, invoice and hedge risks in euros. Without deep euro liquidity on-chain, banks fall back on dollar settlement rails simply because dollar tokens already have the deeper network. The euro faces a distribution problem before it faces a product problem. Another regulated euro token would not by itself create depth, because liquidity develops where counterparties already expect to find one another. "Liquidity begets liquidity," Sell said. Europe's open commercial layer needs bank density Europe's settlement stack splits into three layers by design, and each layer needs a different scale of participation to work. Swift needs near-universal institutional reach to function as messaging infrastructure, while the digital euro needs broad public acceptance to be credible as public money. The commercial-bank layer has a narrower but still difficult task: it needs enough banks, treasurers, custodians and trading counterparties to treat a regulated euro token as a normal settlement asset. Swift has never settled value itself. It carries instructions between institutions that do, which lets it serve many currencies and banks without competing with commercial banks or central banks as an issuer. Its planned shared ledger extends that infrastructure role into tokenised settlement while leaving the money layer to institutions that already carry monetary, credit and redemption responsibilities. The digital euro sits at the public-money layer, where the Eurosystem has framed it as central bank money for citizens and merchants, designed to complement cash and private payment solutions rather than replace commercial-bank money. That public-use design demands near-universal citizen and merchant acceptance, not the large-value commercial settlement asset that institutional treasury, trade finance and capital-market workflows require. Any future extension of the digital euro's mandate into wholesale or institutional settlement would put it in more direct competition with the layer Qivalis is targeting. Qivalis aims to occupy the commercial-bank layer between Swift's messaging infrastructure and the digital euro's public-money mandate, giving banks banks a shared euro settlement asset that keeps client relationships, compliance duties and liquidity management inside the banking system rather than with Swift or the Eurosystem. This layer will decide whether Europe's architecture becomes usable settlement infrastructure or remains a set of parallel initiatives. Bank readiness decides whether density appears Qivalis plans to issue its euro stablecoin as a euro-referenced Electronic Money Token (EMT), created when eligible funds are received and redeemed when holders return tokens for cash. MiCA requires e-money tokens to hold at least 30% of reserves in bank deposits, with the remainder in prescribed liquid assets, giving banks a regulated basis for adoption while raising the commercial bar for scale. The mint-and-burn design keeps a single token fungible across participating banks rather than tied to one issuer's balance sheet. That design supports the network-density objective, but mechanics alone cannot create settlement depth. Sell defined the company's role narrowly: "We're only building the plumbing, the piece that allows the banks to access the token and mint and burn the token." Institutional blockchain adoption depends on legal certainty as well as technology, since banks need a framework before they allocate resources to capital treatment, compliance, custody, operational risk and client onboarding. "MiCA has given the banks the clarity to allow them to start to think about using it," Sell noted. A MiCA-regulated token carries reserve, redemption and disclosure obligations that unregulated or offshore-issued stablecoins do not. But that clarity does not remove the work required inside each bank, where custody arrangements, liquidity limits, treasury policies, client onboarding and operational risk controls must align before a euro stablecoin can support live settlement. Qivalis' greatest strength also creates its main execution risk, as the same 37-bank consortium that gives it unmatched reach also brings variation in risk appetite, governance expectations and implementation pace. Qivalis operates as an independent company with bank shareholders rather than a joint venture run by committee, which Sell said gives it "a certain amount of freedom to build this thing." He added: "We have some of Europe's most trusted names behind us... It makes it even more important that we are as clean and compliant as possible." Backing from major European lenders may give Qivalis credibility with institutional clients, regulators and potential partners, but it also means any weakness in redemption, governance or stress performance would reflect on a much wider group of institutions. The project will only earn the status of settlement infrastructure after the consortium proves it can act with enough speed, consistency and discipline under real market conditions. Project Pangea tests whether the density problem travels Qivalis is a named partner in Project Pangea, announced on 23 June 2026 at the Point Zero Forum in Zurich alongside Chainlink, FairSquareLab and the Unified Korea Alliance (UniKA), which represents more than ten South Korean commercial banks. Cross-border corridors test whether settlement density can travel beyond Qivalis' original shareholder base. The same local-currency settlement question arises wherever euro-denominated flows meet other regional currencies, and each corridor needs enough banks on both sides to make on-chain settlement useful. Trade finance provides a clear example because funds often sit in escrow accounts, move through correspondent banking chains or stay locked while documents, payment instructions and settlement processes catch up. Sell described existing trade flows as "clunky and slow," adding that if money could move "in 10 minutes, it opens up whole new worlds of liquidity" as banks and corporates no longer need to lock up collateral for days at a time. Project Pangea tests network density in a euro-Korean won corridor, using compliant euro and Korean won-denominated stablecoins for payment-versus-payment foreign exchange settlement. The corridor tests whether two currencies can settle simultaneously on-chain, rather than through slower correspondent banking or a US dollar bridge. Qivalis must show that the participation it has assembled in Europe can connect with another currency bloc, another group of banks and another set of institutional workflows. A successful corridor would suggest that the consortium model can extend beyond its original shareholder base, while a weak corridor would show how difficult it remains to turn membership into recurring transaction flow. Qivalis has set its own performance benchmark for that outcome. "The proof will be in the total value locked (TVL)," Sell said, referring to the amount of value held in the token once it goes live. Sell said he hopes Qivalis becomes the largest euro stablecoin by assets under management or TVL within a year of launch. The consortium gives it a starting point, and MiCA gives it a regulatory framework, but the test is whether 37 shareholders with a shared asset can become market infrastructure, or remain a regulated consortium with too little transaction density to change the stablecoin market.
