European banks create Qivalis to develop MiCAR-compliant euro stablecoin - Digital Watch Observatory — 2026-05-22

## Short Segments The Bank of England is rethinking its stablecoin rules after industry pushback. The central bank is reconsidering its proposed limits on stablecoin holdings and reserve requirements, which were initially set to mitigate liquidity risks. Deputy Governor Sarah Breeden acknowledged that the original proposals might have been too conservative. This shift comes as the Bank of England seeks to balance regulatory oversight with the growth of the digital assets sector. The practical effect is a potential easing of restrictions that could allow for more flexibility in stablecoin operations within the UK. This development is crucial for issuers and custodians who are navigating the evolving regulatory landscape. South Korea is set to review its planned 22% crypto tax after a national petition gained over 50,000 signatures. The petition argues that taxing cryptocurrency gains while exempting traditional investments is unfair and could harm the country's crypto market share. The proposed tax, scheduled for 2027, applies to gains over 2.5 million won. The review by the National Assembly's Finance and Economic Planning Committee could lead to changes in the tax policy, impacting investors and the broader crypto industry in South Korea. This review highlights the ongoing debate over equitable taxation in the digital asset space. Ethereum Layer 2 Zero Network is winding down operations, redirecting resources to Zerion's API and wallet services. Users have until July 31, 2026, to withdraw their assets from the gasless rollup platform. This closure marks a strategic pivot for Zerion, focusing on its core wallet and API offerings. The decision reflects broader trends in the crypto space, where projects are consolidating efforts to enhance core services. For developers and users, this means transitioning away from Zero Network and adapting to Zerion's evolving product focus. ## Feature Story European banks are launching Qivalis, a MiCAR-compliant euro stablecoin, aiming to bolster monetary autonomy and counter dollar dominance. This Amsterdam-based joint venture, backed by major banks like ING and BNP Paribas, plans to issue a regulated euro stablecoin by late 2026. The initiative seeks authorization from the Dutch Central Bank as an Electronic Money Institution. This move is part of a broader strategy to integrate blockchain infrastructure into traditional banking, offering a euro alternative to dollar-backed stablecoins. The significance lies in its potential to reshape Europe's financial landscape by providing a stable, euro-denominated digital asset. This development is crucial for issuers and payment companies looking to leverage blockchain technology while adhering to regulatory frameworks. As the digital euro remains in legislative limbo, Qivalis represents a proactive step by the private sector to ensure Europe's financial sovereignty. The key tension here is between the need for a robust euro stablecoin and the risk of falling behind in the global digital currency race. For regulators and financial institutions, the success of Qivalis could set a precedent for future euro-denominated digital assets, influencing policy and market dynamics across the continent. As we watch this unfold, the focus will be on how Qivalis navigates regulatory hurdles and market adoption in the coming years.