BANK OF IRELAND and AIB have joined a consortium which plans to launch a euro-pegged cryptocurrency.

Amsterdam-based Qivalis aims to develop a euro-denominated stablecoin and is targeting a market launch in the second half of this year.

A stablecoin is a type of cryptocurrency whose value is pegged to another asset – usually a fiat currency, like the euro.

This prevents the wild price fluctuations often seen in the cryptocurrency market.

The stablecoin market leader is Tether, which is pegged to the US dollar.

Qivalis hopes to challenge the dominance of Tether with its upcoming euro-pegged stablecoin – only 0.2% of global stablecoin circulation is euro-denominated.

The initiative aims to deliver a stablecoin fully backed on a 1:1 basis with the euro.

Bank of Ireland and AIB were two of 25 banks that joined the project today, which means 37 banks now back the initiative.

An AIB spokesperson said the project will result in a “regulated, euro-denominated compliant stablecoin that will enable seamless, efficient and secure payments and settlements within Europe and globally”.

The spokesperson added that by “developing a fully regulatory compliant euro stablecoin, Qivalis seeks to enable the European finance sector to expand its digital infrastructure and build the future of European payments and settlements”. 

AIB’s Geraldine Casey said the bank is joining the consortium “because we believe Europe needs trusted, regulated innovation in payments and settlement”.

“This is a practical step for AIB to learn, innovate, test and collaborate with other leading European banks, and to help shape how new forms of digital money can be used safely, responsibly and within the regulated banking system,” she added.

Elsewhere, Bank of Ireland said the Qivalis project will “support large-scale digital payments and settlement on a blockchain – a shared, secure digital record of transactions – rather than through traditional banking systems”.

The Bank of Ireland spokesperson said this means “money can move faster and more efficiently, settling quickly, operating 24/7 and relying on fewer intermediaries, while still using the euro”.

Meanwhile, Qivalis CEO Jan-Oliver Sell said he is “thrilled” to welcome both Bank of Ireland and AIB to the consortium.

He said today’s expansion “marks a giant leap toward an open and compliant on-chain ecosystem for the euro”.

“The euro is Europe’s currency, and on-chain financial infrastructure should carry it – built by European institutions and governed by European rules.”

Other new banks to join the consortium today include the National Bank of Greece and Swedbank, while existing consortium members include BBVA, BNP Paribas, CaixaBank, Danske Bank, and UniCredit.