The French bank with a history of 175 years has issued its first stablecoin according to new EU regulations.

Source: cryptoslate

Compiled by: Blockchain Knight

The French banking group ODDO BHF has launched the euro-backed stablecoin EUROD, which is a compliant digital version of the euro under the new EU Regulation on Markets in Crypto-Assets (MiCA).

This move by the bank, which has a history of 175 years, demonstrates that traditional banks are gradually expanding into the regulated blockchain finance sector.

ODDO BHF, which manages assets exceeding 150 billion euros, stated that EUROD will be listed on the Bit2Me exchange based in Madrid.

Bit2Me is supported by Telefónica, Banco Bilbao Vizcaya Argentaria (BBVA), and Unicaja Banco in Spain. It has been registered with the National Securities Market Commission (CNMV) in Spain and is one of the first exchanges to receive MiCA authorization, which allows it to expand its business across the EU.

ODDO BHF collaborates with the infrastructure provider Fireblocks to handle custody and settlement matters, and EUROD is issued on the Polygon network for faster and cheaper transactions. This token is fully backed by euro reserves and is subject to external audits.

Bit2Me CEO Leif Ferreira stated that this listing “builds a bridge between traditional banking and blockchain infrastructure” in the context of Europe embracing regulated digital assets.

The “Regulation on Markets in Crypto-Assets” (MiCA), effective this year, requires stablecoin issuers to maintain a 1:1 reserve and ensure redeemability, while enforcing strict governance and transparency standards.

The launch of EUROD will test the practical effects of MiCA in coordinating digital asset regulation across the EU.

Christine Lagarde, the President of the European Central Bank (ECB), recently warned that foreign stablecoins lacking a “robust equivalence regulatory framework” could trigger a reserve run in the Eurozone.

In a letter to the European Parliament, she urged lawmakers to limit the issuance of stablecoins to EU-authorized companies and used the collapse of TerraUSD as an example to demonstrate the risks associated with unregulated projects.

According to data from CoinGecko, the market value of euro-pegged stablecoins has doubled this year, with Circle's EURC dominating the market and its market value rising to approximately $270 million.

Under the MiCA framework, the demand for bank-issued stablecoins such as EUR CoinVertible issued by Société Générale is relatively low.

Jürgen Schaaf, an advisor to the European Central Bank, believes that Europe must accelerate its pace of innovation, or it may face the risk of “erosion of monetary sovereignty.”

The European Systemic Risk Board (ESRB) has warned that the multi-issuer model of jointly issuing the same stablecoin by EU and non-EU companies could introduce systemic risks and requires enhanced regulation.

Despite these warnings, the regulatory clarity brought by MiCA has still fostered market competition:

The FORGE division of Société Générale has launched the euro stablecoin EURCV; Deutsche Börse has partnered with Circle to incorporate EURC and USDC into its trading system.

Nine European banks, including ING, CaixaBank, and Danske, have formed the Dutch Alliance, planning to issue a euro stablecoin compliant with MiCA requirements by 2026. Citigroup subsequently joined the alliance, with the related stablecoin expected to be launched in the second half of 2026.

At the same time, 10 G7 banks, including Citigroup and Deutsche Bank, are exploring the issuance of multi-currency stablecoins to modernize the clearing process and enhance global liquidity.

Compared to the over 160 billion dollars in USD-pegged stablecoins, the total market value of euro-backed stablecoins is still small, at less than 574 million dollars.

Regulators believe that if transparent management can be achieved, euro-denominated digital assets will help enhance financial sovereignty.

For ODDO BHF, EUROD is a strategic initiative to attract institutional clients through compliance and credibility.

The development of this stablecoin will depend on the acceptance level of payment providers and investors who are seeking a reliable euro alternative asset in the digital economy.