On September 25, 2025, nine European banks announced plans for a joint euro stablecoin. The project later got a name, Qivalis, and grew to 37 banks. Yesterday, a little more than a year later, it got its license.

De Nederlandsche Bank (DNB) authorized Qivalis as an electronic money institution, which allows it to issue euro e-money tokens under MiCA.

We spoke with CEO Jan-Oliver Sell about what happens next. A couple of insights:

  • The white paper comes next. DNB can take up to 20 business days to review it. Until it is published, no exchange can list the token and partners cannot finish onboarding. The reserve banks, selected through an RFI, must also be live before the first token is issued. Qivalis is eyeing a launch within the next few months. Our read: the ambition is to go live this year.

  • A two-phase launch playbook. Qivalis intends to first build the onchain ecosystem around its token, following the classic issuer playbook: exchange listings, market maker agreements and DeFi integrations. The goal is to build up onchain liquidity before the member banks arrive. Only a few members will be able to mint, redeem or custody the token on day one, and even those with infrastructure in place are still designing their pilots. Sell expects the first bank use cases in Q1 or Q2 2027.

  • Payments and trade finance lead. Asked which use cases currently rank highest among member banks, Sell named cross-border payments and trade finance, including physical commodity trading. Qivalis is also in talks directly with trade finance houses and with the companies building platforms for these flows.

The sequencing makes sense. For a euro stablecoin, payments and settlement flows are still thin at best, which leaves DeFi and crypto markets as the fastest route to early traction.

In euro stablecoin land, that’s an uphill battle, though:

  • Circle’s EURC, with its first-mover advantage and more than 60% of the euro market, keeps growing, but at around €440m it is still nowhere near relevant scale.

  • SG-FORGE’s EURCV, at €169m, has found it hard to build meaningful demand beyond its Deblock vault integration.

  • AllUnity has stepped out of the DeFi-subsidy-war altogether and is betting on emerging segments like onchain FX and agentic payments instead.

One of biggest challenges in kickstarting DeFi activity is borrow demand. Onchain there still isn’t much to do with a euro stablecoin, and Qivalis won’t change that on day one.

So, eyes on the prize. It sits with the member banks’ institutional use cases and their ability to unlock them.

IN TODAY’S BRIEFING:

  • EBA classifies USDC as EU’s first significant e-money token

  • ESMA opens review of tokenized collateral in EU clearing

HIGH SIGNAL NEWS

  • Citadel Securities and BNY complete tokenized U.S. Treasury triparty repo. Citadel Securities purchased a two-year Treasury note through BNY on Tradeweb, which was then tokenized on BNY’s private ledger and settled within minutes instead of T+1. Citadel subsequently used the note as collateral in an overnight repo with BNY, marking the first use of tokenized assets on a major triparty repo platform. 💱

  • BNY expands digital asset custody platform to Europe. Through its European banking entity, BNY now offers custody, administration, and transfer services for crypto-assets including BTC, ETH, SOL, and USDC to select institutional clients. The expansion makes BNY one of the first G-SIBs to offer regulated crypto custody in the EU. 🌍

  • EBA classifies USDC as EU’s first significant e-money token. This makes the stablecoin the first of 45 e-money tokens notified under MiCA to meet the threshold for significant status. Starting November 12, 2026, the European Banking Authority will take over supervision of capital requirements, reserve assets, liquidity, and recovery and redemption plans from France’s ACPR, which will retain oversight of areas including governance and outsourcing. 💵

  • EU finance ministers want DLT Pilot Regime cap raised to €300 billion. The proposal goes well beyond the European Commission’s plan to raise the limit per DLT market infrastructure from the current €6 billion to €100 billion. It would also allow the Commission to raise the cap further to €500 billion through a delegated act. ECB President Christine Lagarde objected, warning that DLT infrastructures may not be interoperable and could reintroduce fragmentation, and urged the European Parliament to revisit the figure. 🇪🇺

TOP STORY

ESMA Opens Review of Tokenized Collateral in EU Clearing

Tokenized collateral under review: Last week, the European Securities and Markets Authority (ESMA) launched a call for evidence on tokenization in EU central clearing. The regulator wants to know whether the collateral that central counterparties (CCPs) like Eurex Clearing, LCH SA and Euronext Clearing rely on today — from government bonds to cash — can move onto a ledger while giving them the same protection in a default. Responses to its 30 questions are due by 15 January 2027.

  • Why it matters: Clearinghouses guarantee that trades between two parties are completed. When two banks trade interest rate futures, the CCP becomes buyer to the seller and seller to the buyer, and it demands margin collateral from both in case either fails. If a member defaults, the CCP sells that collateral to cover the losses, so it accepts only assets it can sell fast and without legal doubt. At the end of June, Europe’s largest clearinghouses held around €510 billion in initial margin, roughly a third of it at EU-based CCPs. ESMA’s findings could shape how much of that share eventually moves onto a ledger.

The efficiency case: Once tokenized on a ledger, collateral could move in minutes. Today, it can take hours or days, because settlement systems work to fixed cut-offs and close overnight and at weekends. A trade this week showed the difference: a Treasury note bought by Citadel Securities settled on BNY’s ledger in minutes instead of the next day, and Citadel then used it as collateral to borrow cash overnight. A September report by Citi and research firm ValueExchange shows what the slower system costs:

  • The average G-SIB posts $74 billion of collateral a day, across ~65 custody locations.

  • Firms post 6–7% more collateral than they need, because a failed transfer costs more than an idle asset.

  • To avoid missing cut-offs, firms post up to 63% of their margin the night before a margin call.

Europe’s live case: ESMA has seen only one project in EU clearing that addresses this problem. Since mid-2025, Eurex Clearing members have been able to move collateral in minutes via a ledger run by HQLAx, a Deutsche Börse-backed operator, so they can in principle post it when the call comes. The securities stay blocked at their custodian while the ledger records their transfer to the CCP. Eurex says members use it daily but has not disclosed volumes.

A U.S. template: The U.S. has moved earlier on regulatory clarity. In December 2025, staff at the Commodity Futures Trading Commission (CFTC) clarified that tokenized versions of eligible collateral can be accepted under existing rules. In July, J.P. Morgan used tokenized securities to meet a margin requirement at CME Group in DTCC’s live tokenization trades.

Four key tests: Before EU clearinghouses can follow at scale, ESMA wants evidence on four points where a token could still differ from the asset behind it:

  • Ownership: When a bank posts a bond that exists only as a token, the CCP must be sure it legally holds the collateral. ESMA asks whether handing over the token, or the digital key that controls it, has the same legal effect as a transfer between securities accounts — a question still governed by national property law.

  • Default: In “digital twin” set-ups like Eurex’s, where the ledger mirrors bonds that stay with a custodian, a CCP selling collateral after a member fails still relies on that custodian. ESMA asks which record counts if the two disagree.

  • Valuation: CCPs value securities below market price, applying a haircut. ESMA asks whether operational and cyber risks specific to tokens could warrant adjusted haircuts, which could eat into the efficiency gains.

  • Cash: CCPs collect daily gains and losses in cash, so tokenized bonds only help if cash can move on a ledger too. ESMA questions whether stablecoins qualify, because their value can drift from the currency they track. The Eurosystem’s Pontes service, live since 21 September, settles ledger transactions in central bank money, but only during limited business hours.

Outlook: The answers should show whether a token gives a CCP the same certainty in a crisis as the asset behind it. ESMA will assess the responses in the first quarter of 2027 and then decide on next steps. The cash leg will take longer, with Pontes due to run 22.5 hours per business day in 2027 and around the clock in 2028. Until then, digital twins such as Eurex’s are likely to remain the most practical route for tokenized collateral into EU clearing.

Nick Wittek is a Partner at global law firm Jones Day, where he advises financial institutions, asset managers and fintechs on structured finance, derivatives and digital assets, with a focus on tokenization, stablecoins and crypto custody.

ESMA’s call covers the clearinghouse side. What else would it take for a tokenized asset to be treated like the asset behind it in practice?

One key challenge is to apply this principle and distinguish tokenized financial instruments from crypto-assets: Banks and regulators can easily fall into the trap of mixing the two. For example, a bank may still fear that a tokenized financial instrument could carry a higher capital weight than the same asset in conventional form, simply because of the reference to “token” or “crypto”. Another hurdle is the lack of operational adoption of DLT infrastructure, such as wallets, by the industry (including the Eurosystem).

Hence, tokenized collateral may remain ineligible as collateral for the Eurosystem, even though it is legally the same instrument as its traditional counterpart, simply because the technical infrastructure is lacking. That creates a chicken-and-egg problem: without central-bank eligibility and broad wallet access, liquidity remains thin; without liquidity, eligibility is harder to justify.

Taking technology neutrality seriously therefore means removing these hurdles. It also means taking competition with the U.S. seriously. DTCC is set to launch its DLT service permitting participants to hold (certain) securities (including U.S. treasuries) either in a conventional account or in a wallet, paving the way for 24/7 trading. Once investors can trade U.S. securities at any hour, issuers will ask why they should still list in Europe.

Andreas Panagiotopoulos is a post-trade commercial specialist with experience across the clearing and custody layers of market infrastructure. Most recently at BNY, the world’s largest custodian bank, he covered Tier 1 banks and asset managers.

As collateral moves onchain, how might the role of custodians change?

Tokenization is often expected to cut custodians out of the collateral chain. But that expectation overlooks what the technology actually removes: reconciliation, settlement delays and manual messaging. What remains is the need for someone to hold the keys, service the asset, keep client holdings legally segregated and stand behind them when something goes wrong.

The real pressure falls on the chain of intermediaries in between. As you already pointed out, G-SIBs manage their collateral across dozens of custody locations. Tokenization attacks that fragmentation, and local subcustodians will feel it first.

As these intermediary layers come under pressure, the custodians that stand to benefit are those that become orchestrators: maintaining the golden record behind digital twins and moving collateral across ledgers and legacy rails around the clock. But they won’t have that space to themselves, as DTCC and LSEG are building the same layer. So custodians’ toughest competition may come not from fintechs, but from the infrastructures they plug into.

  1. Are Stablecoins and Bank Deposits Substitutes? (BIS) — This paper finds evidence that stablecoins and bank deposits compete for the same pool of money: when banks raise deposit rates, stablecoin growth tends to slow, with the effect stronger for USDC than USDT. The authors argue that as stablecoins grow, this substitution could increasingly matter for bank funding and monetary policy transmission.

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Disclaimer: The information provided in the Institutional Briefing by Blockstories does not constitute investment advice. Accordingly, we assume no liability for any investment decisions made based on the content presented herein.

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