Wednesday’s announcement that AIB and Bank of Ireland have joined a consortium of EU banks developing a stablecoin is intriguing for a couple of different reasons. Firstly, the unveiling of Qivalis – the joint venture initially backed by heavyweights like BNP Paribas and ING – last September came just months after a European Central Bank (ECB) official delivered a stark warning on the rise of the asset class. Because the vast majority of the stablecoins on the market are denominated in US dollars, ECB adviser Jürgen Schaaf argued in a July blog post that if they became prevalent in the euro area, they could weaken Frankfurt’s control over monetary policy. ECB president Christine Lagarde underlined those concerns recently when she said the encroachment of US stablecoins posed a “legitimate concern that risks entrenching dollar dependency”. At first glance, then, the development by Qivalis of a euro-denominated stablecoin – and the venture’s expansion this week to include Irish lenders among a group of 37 banks – should be a cause for celebration in Frankfurt. But there is a flipside to that coin. Some commentators have argued that the Qivalis project is really part of a power struggle between the private and public sector – in this case, central banks – over the future of settlements and even the currency itself. Specifically, the ECB is in the process of developing a digital euro, which is not itself a stablecoin but a digital representation of the euro that can be used for small, day-to-day transactions. There is some overlap between the two, however, and some critics of the move see Qivalis as an attempt to crowd out a genuinely public monetary instrument – the digital euro – with a privately backed one. Others believe there is room for both assets to coexist, with the Qivalis-developed stablecoin more appropriate for larger, corporate transactions. Exactly what ECB officials think of all of this in their private moments is not certain. What is clear, however, is that the pressure is on Frankfurt to get the digital euro project off the ground sooner rather than later.