Banks enter the war for Europe's stablecoin market

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By TP

Amid the changes that the European Union (EU) stablecoin market has experienced, following the entry into force of the Market in Cryptoassets Regulation (MiCA), there are more and more banks interested in entering the ecosystem. This time it is the turn of Banking Circle, a bank regulated in the EU that was created in 2016. The financial institution, which is focused on cross-border payments, has just launched EURI. It is a stable coin that meets the requirements established by MiCA for the operation of stablecoins and that – according to the company's statement – will be issued through blockchains. Ethereum and BNB Smart Chain (from Binance) “EURI will be subject to transaction monitoring and risk assessments for fraud identification and general risk mitigation,” Banking Circle’s letter states, adding that it aims to enter the competition that currently exists for dominance of the European stablecoin market. The plan is launch other stablecoins and tokenized money in the future, to provide more options to users in a context where the battle within the stablecoin market in the region is marked by the imminent exit of USDTAs BitcoinDynamic has reported, it is expected that in the coming months the stablecoin that dominates the world market (including that of Europe) exit the regulated market of the regionThis, after Tether decided not to comply with MiCA's demands, considering them to be detrimental to the company.

MICA forces stablecoins to be delisted from exchanges operating in Europe. Composition by BitcoinDynamic. Source: ipopba / adobe.stock.com ; Tether / Tether ; Stasis / coinmarkepcap ; ECB / ecb.europa.eu. Tether's decision has generated changes in the EU market, which was dominated by more than 90% by USDT. All this, in the midst of the entry into force of new regulations for stablecoins since June 30, and currently being in a period of six months of transition. From what has been observed so far, the stablecoin that has gained more ground USDC is the main rival of USDT which is also backed by dollars. Although other euro-denominated coins such as EURS, EURC, EURA and EURT are entering the competition, at the same time the dollar stablecoin market is lagging behind.

Banks want to take advantage of stablecoins

The goal of the European authorities is for euro stablecoins to gain more ground, this being the context in which Banks want to get into the act. This explains the move by Banking Circle, which with its stablecoin EURI plans to compete even with the stablecoins of other banks in the region. The European bank thus joins a growing trend around the world, with traditional financial institutions developing their own stablecoins. Among them are important and old entities in Europe, such as Société Générale-FORGE (SG-FORGE), a subsidiary of the Société Générale Group that last year launched its EUR CoinVertible (EURCV), based on Ethereum. It will do the same German giant Deutsche Bankwhich last July announced its plans to launch a euro-pegged stablecoin next year, through its subsidiary DWS. The idea is to meet the needs of cryptocurrency investors and industrial applications, at a time when it is expected Increased demand for regulated digital currencies. This is due to MiCA. In this way, European banks are not only placing their hopes on the growth of euro stablecoins, but are following the guidelines that are being set Most financial institutions globally and that seek to take advantage of the benefits of a market that is in full expansion and that already exceeds USD 170 millionAs most analysts point out, as a novel form of interoperable and programmable money, these currencies have the potential to reshape the global financial system. In doing so, they “could displace legacy payment networks and credit cards such as SWIFT, Visa and Mastercard, accelerate the unbundling of financial institutions and expand access to currencies in countries with restrictions, including due to sanctions.”