MiCA Spurs Stablecoin Race: European and U.S. Banks Target Blockchain Payment Market

European banks are launching Euro-backed stablecoins under the MiCA framework.

U.S. banks, including JPMorgan, await regulatory clearness to expand stablecoin and blockchain offerings.

MiCA demands licensing and reserve guidelines while central banks explore CBDCs as likely competitors.

Banks across Europe and the United States are strengthening their efforts to debut stablecoins. This move is driven by increasing regulatory clarity and a rising demand for blockchain-based payment solutions. Regulatory frameworks such as the European Union’s Markets in Crypto-Assets Regulation (MiCA) and blockchain innovation are pushing traditional financial institutions to compete with crypto firms like Tether Holdings.

European Banks Enter Stablecoin Competition

According to Bloomberg, European banks are rolling out stablecoins to capture a share of the lucrative digital asset market. Societe Generale – Forge (SG-Forge), based in France, has introduced its Euro-backed stablecoin for retail investors.

Frankfurt-based Oddo BHF SCA and London’s Revolut are also preparing to launch their own Euro stablecoins. Deutsche Bank’s asset management arm, DWS-backed AllUnity, plans to introduce its stablecoin by 2025.

SG-Forge CEO Jean-Marc Stenger confirmed that discussions are ongoing with ten banks for partnerships using SG-Forge’s stablecoin technology. In addition, Visa Inc. is collaborating with institutions like BBVA to develop stablecoin solutions using blockchain technology. Discussions are ongoing with organizations in regions such as Hong Kong, Singapore, and Brazil.

U.S. Banks Await Regulatory Authorization

In the United States, banks are monitoring legislative changes required to issue stablecoins. JPMorgan Chase has tested blockchain-based payment systems and introduced its deposit token, JPM Coin, for internal transfers. However, these tokens lack the universal connectivity associated with standard stablecoins.

Naveen Mallela, co-head of JPMorgan’s digital assets division Kinexys, stated that stablecoins and tokenized deposits could coexist as payment methods within three years. Ambiguities around reserves and federal insurance for deposits remain hurdles for U.S. banks.

MiCA Sets Stablecoin Standards in Europe

The MiCA regulation, effective December 30, 2024, mandates licensing, reserve guidelines, and investor protection for stablecoin issuers. Circle’s USDC has already secured MiCA approval, broadening its use in the region. Tether Holdings has yet to announce plans for a Euro-pegged stablecoin license, creating opportunities for competitors.The European Central Bank has raised concerns over stablecoin use, citing potential impacts on bank liquidity. Meanwhile, central banks are pursuing CBDCs, which could compete with commercial bank-issued stablecoins.

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