*

New company based in the Netherlands, CEO to be appointed

soon

*

Move a sign of banks' increased openness to digital

markets

*

ECB sceptical of stablecoins, says pose policy, stability

risks

(Adds context in paragraph 5, context on other initiatives in

paragraph 10, issuance statistics in paragraphs 11-12)

By Tom Sims, Tommy Reggiori Wilkes and Valentina Za

FRANKFURT, Sept 25 (Reuters) - A consortium of nine

European banks, including ING and UniCredit,

said on Thursday they are forming a new company to launch a

euro-denominated stablecoin, a move that signals mainstream

finance's shift to embrace digital markets.

The company will be based in Amsterdam, a spokesperson for

DekaBank, another of the participating institutions, said. Its

stablecoin is expected to launch in the second half of next

year, the consortium said in a statement.

Stablecoins are digital tokens designed to keep a constant

value and are backed by traditional currencies such as the U.S.

dollar or euro. They are used in digital payments and

cross-border transactions, particularly in emerging markets, and

as a means of bringing stability to exchanges of volatile

cryptocurrencies.

DOLLAR DOMINATES STABLECOIN, ECB REMAINS SCEPTICAL

The banks, who said the new tokens can be used for quick,

low-cost payments and settlements, launched the initiative even

as the European Central Bank voices scepticism over stablecoins.

ECB President Christine Lagarde in June told European

policymakers that stablecoins posed risks for monetary policy

and financial stability, and urged European lawmakers to

introduce legislation backing the launch of a digital euro. Some

commercial banks, however, have pushed back on the introduction

of a digital euro.

In addition to ING, UniCredit and DekaBank, other banks

participating in the new company include Banca Sella,

KBC, Danske Bank ( DNSKF ), SEB, Caixabank

and Raiffeisen Bank International.

They said that others could join the initiative, and a CEO

for the company would be appointed soon.

"We are contributing to fill the need for a trusted,

regulated solution for on-chain payments and settlement, paving

the way for a new standard in the digital asset space that will

support Europe's growth and financial sovereignty," said

UniCredit head of strategy Fiona Melrose.

Societe Generale's crypto arm, SG-FORGE, launched

a euro-based stablecoin in 2023, although it has not been widely

adopted, with just 56.2 million euros ($66 million) in

circulation, according to its website. The French bank also

launched a U.S.-dollar stablecoin earlier this year.

Global stablecoin issuance, which is overwhelmingly pegged

to the U.S. dollar, stands at nearly $300 billion, according to

figures released last week by the Bank of Italy.

Euro-denominated stablecoins totalled just $620 million, the

figures showed.

That compares with global crypto-asset capitalization of $4

trillion.

($1 = 0.8513 euros)