Traditional banks are launching euro-denominated stablecoins as Tether discontinues its EURt amid the EU’s MiCA regulations.
Societe Generale-Forge leads stablecoin initiatives with EURCV, while others like Revolut and BBVA explore entry.
Visa and global banks are advancing stablecoin solutions despite regulatory hurdles and competition from Central Bank Digital Currencies.
Tether Holdings has announced that it would cease the issuance of the EURt stablecoin over the new Market in Crypto-Assets (MiCA) in Europe. The first EURt stablecoin introduced in 2016 never went mainstream, its market capitalization sunk to $37M compared to USDT $138B. As such, the sector’s evasion has created the chance for conventional banks to enter the stablecoin market and meet the rising demand.
Societe Generale-Forge at the Vanguard
Societe Generale-Forge (SG-Forge) has risen to the top as the institution that issues its euro-backed stablecoin called EURCV; recently it became available to the public. With this change, the bank demonstrates its desire to grab as much market share of stablecoins as possible. SG-Forge’s CEO Jean-Marc Stenger said he is negotiating with several banks regarding the use of stablecoin technology as partners, and or using its solutions on a white-label basis.
European Banks Expand Stablecoin Initiatives
Besides Societe Generale, banks like Revolut, Oddo BHF, and BBVA are exploring their versions of euro-denominated stablecoins. Additionally, AllUnity plans to issue a euro-based stablecoin in 2025, leveraging MiCA’s clear regulatory framework. MiCA simplifies compliance for stablecoin issuance, fostering competition in the European stablecoin market.
While European banks rapidly embrace stablecoin opportunities, US counterparts remain cautious due to the lack of legislative clarity. However, analysts predict a surge of activity in the US stablecoin market once regulatory guidelines are formalized. JPMorgan Chase has already taken steps by exploring deposit tokens, a blockchain-based alternative similar to stablecoins.
Global Banks and Visa Join the Stablecoin Race
The stablecoin market is also drawing attention from global players like Visa, which launched a tokenization network for stablecoin issuance. BBVA is among the banks piloting Visa’s technology, with several others, including institutions in Brazil, Singapore, and Hong Kong, showing interest. Meanwhile, Standard Chartered has partnered with Animoca Brands and Hong Kong Telecommunications to issue HKD-denominated stablecoins as part of a local pilot program.
Despite this momentum, stablecoins face hurdles such as liquidity coverage risks identified by the European Central Bank. The rise of Central Bank Digital Currencies (CBDCs) also poses competitive challenges for bank-issued stablecoins in wholesale payment systems. In the US, regulatory uncertainty surrounding acceptable reserves and deposit insurance further complicates adoption.
Banks remain undeterred by these challenges, with many considering stablecoins a lucrative opportunity to modernize financial systems and meet market demand.