ING Prepares Stablecoin as EU Rules Attract Banks to Digital Assets

Dutch bank ING is developing a stablecoin project under Europe’s new MiCA crypto regulations, joining a growing list of traditional lenders exploring regulated digital currencies, according two people familiar with the matter told CoinDesk.

The effort may involve a group of banks and crypto service providers forming a joint venture, though progress has been slow as each participating institution must secure board approval, one source said. ING declined to comment.

The MiCA regulation — which came into full effect in late 2024 — imposes strict rules on stablecoin issuers operating in the EU. Issuers must hold fully backed reserves, keep those reserves segregated from users’ assets, and adhere to regular disclosures.

So far, 10 euro-pegged and five dollar-pegged stablecoins secured MiCA approvals, according to Circle’s Patrick Hansen. Approved entities include Circle, Crypto.com, Société Générale, and Membrane Finance.

Tether, which dominates the $233 billion stablecoin market, opted out of the MiCA licensing process.

If ING moves forward, it will compete directly with France’s Société Générale, which became the first major European bank to issue a stablecoin through its SG Forge unit.

The news comes shortly after Synthetic stablecoin issuer Ethena Labs shut down its operations in Germany, less than a month after the country’s top financial regulator, BaFin, flagged compliance issues with its USDe stablecoin.

Ethena said it reached an agreement with BaFin to fully cease activities of its German subsidiary, Ethena GmbH. The firm also confirmed it will no longer seek authorization under the European Union’s Markets in Crypto-Assets Regulation (MiCA) in Germany.

The move follows BaFin’s order on March 21 to halt all minting and redeeming of USDe in the country, citing legal concerns and possible securities law violations. Ethena clarified that since BaFin’s intervention, the German entity has not handled any transactions involving USDe.

USDe is currently the fourth-largest stablecoin, with a circulating supply of $4.9 billion, according to CoinMarketCap. However, BaFin’s pushback and MiCA’s tighter rules are raising barriers for synthetic stablecoins in the EU.

Ethena GmbH used a transitional arrangement under the European MiCAR regulation, which allows cryptocurrency issuers to continue operations until they are granted or denied authorization, provided they apply by July 30, 2024. However, BaFin claims that Ethena GmbH began offering USDe in Germany on June 28, 2024, and distributed a big portion of its 5.4 billion USDe tokens outside Germany before this date.