European banks back Amsterdam-based Euro stablecoin project Qivalis

European lenders back Qivalis stablecoin initiative

Key lenders in the European region, including BNP Paribas, ING and UniCredit, have pledged their support for a stablecoin project planned by Qivalis. Traditional banks are increasingly exploring stablecoins to speed up transactions, cut costs, improve interbank settlements and manage payments and collateral.

Qivalis is eyeing mass support for the Euro-backed stablecoin at a time when European financial institutions are concerned about the dominance of US Dollar-pegged coins, which account for the lion's share of the sector's approximately $320 billion market value.

European Central Bank (ECB) President Christine Lagarde weighed in on the matter earlier this month, saying that the use of US Dollar-denominated stablecoins poses "a legitimate concern that risks entrenching dollar," according to a Financial Times report.

Jan-Oliver Sell, CEO of Qivalis, believes that the European region's sovereignty is critical to prompting people to rethink stablecoin use and seek alternatives to the US Dollar. Although several Euro-denominated stablecoins already exist, they lag significantly behind major stablecoins such as USDT and USDC. Circle's EURC token has the highest market capitalization at $443 million, according to CoinGecko.

Sell is working on expanding the support base for the new project, targeting non-European banks operating in countries with notable remittance flows from Europe, the Financial Times reported.

The CEO clarified that the Qivalis stablecoin project is not "competing with payments in Europe because payments in Europe work," but seeks to enhance activities such as cross-border payments and atomic or instant settlements.

Qivalis has filed with the De Nederlandsche Bank (DNB), the Dutch central bank, for a license and will go live immediately after approval, hopefully in the second half of this year.

Bitcoin, altcoins, stablecoins FAQs

What is Bitcoin?

Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.

What are altcoins?

Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.

What are stablecoins?

Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.

What is Bitcoin Dominance?

Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.