Key Takeaways
- Tether (USDT) and the Binance (BUSD) stablecoin have both pulled out of EU markets due to MiCA.
- Ethena’s USDe stablecoin has a market cap of $4.92 billion.
- Ethena (ENA) is trading down 5.35% at $0.29 for the past 24 hours.
The European Union’s (EU) sweeping Markets in Crypto Assets (MiCA) regulations are proving to be a difficult hurdle for stablecoin issuers, as Ethena Labs is forced to pull out of Germany.
This would mark the third stablecoin issuer to officially fail to receive MiCA approval and exit EU markets.
Ethena Drops Out
As per the latest post from Ethena Labs, the firm has agreed with BaFin to shutter all the activities of its European arm, Ethena GmbH, after failing to comply with MiCA regulations.
Ethena GbMH was created as the German arm of Ethena, which is based in the British Virgin Islands (BVI). It serves to support the firm’s European operations, and is registered in Frankfurt, Germany.
Ethena’s primary role was to help bring Ethena into compliance with EU regulations so that it could. It also worked on software development, as well as providing marketing and customer support.
The decision comes just weeks after the firm failed to get its MiCA application approved. At this time, BaFin also prohibited all public sales of Ethena GmbH’s USDe stablecoin, citing MiCA violations and alleging the firm was selling unregistered securities.
Stablecoins Under MiCA
Ethena’s synthetic dollars aren’t the only stablecoins that suffer under the EU’s MiCA regulations.
In fact, three of the largest stablecoin issuers have all faced significant challenges. Tether (USDT) failed to gain MiCA approval and subsequently had its token delisted from multiple EU-based crypto platforms.
Binance’s stablecoin, BUSD, was also delisted from EU platforms as it failed to meet MiCA’s reserve backing requirements and due to non-compliance.
Circle’s USD Coin (USDC) has managed to stay in operation in the EU after gaining approval to roll out a euro-pegged stablecoin, EURC. In addition, Circle scaled back USDC offerings in the region due to MiCA, with some EU exchanges also delisting USDC.
Furthermore, the EU also appears concerned with the growing dominance of U.S. dollar-denominated stablecoins, a matter that is seemingly pushing the EU to develop its digital Euro central bank digital currency (CBDC).
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
