French banking giant ODDO BHF launched the euro-backed EUROD stablecoin. This move signals major European financial entry into the regulated crypto market.
French banking giant ODDO BHF officially entered the cryptocurrency market. The bank announced the launch of its euro-backed stablecoin, EUROD. ODDO BHF has more than EUR 150 billion assets under management. This strategic move is indicative of institutional belief in digital finance.
Major European Bank Commits to Regulated Digital Assets
EUROD will launch on the Bit2Me platform. Bit2Me is a Spanish crypto exchange based in Madrid. It is supported by big institutions. For example, it is supported by the Spanish telephone company Telefonica and banking groups Unicaja and BBVA. A solid institutional base is indicated by its partnership.
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ODDO is the first to announce the stablecoin in the latter part of 2024. The Paris-based group had anticipated a late 2025 release. However, this was on hold for essential regulatory approval. ODDO operates in a number of banking sectors. These involve asset management, corporate, and investment banking.
Furthermore, the bank would like to adopt EUROD as a payment medium. It is a mix between the agility of stablecoin and the bank-based stability. Fireblocks is a company that Ops Dynamo has partnered with before. This partnership was focused on the creation of the new stablecoin asset.
It comes as stablecoins top $300 billion. Most, however, are dollar-denominated tokens. However, regulatory approval is becoming increasingly important for the use of stablecoins. This ensures that the de-pegging risk is not volatility-based.
The current stablecoin in EURC is already in use. It is traded primarily through centralized exchanges. Besides, it has active pairs on Aerodrome and Orca. EURC is a multi-chain asset as in the case of Circle. Its reserve is also in line with MiCAR.
New Regulatory Framework Drives European Stablecoin Expansion
The creation of EUROD stablecoin is in line with the MiCA framework. MiCA will soon be operational in the entire European Economic Area. This is expected by early 2025. As a result, this framework brings together digital asset policies.
MiCA has brought forth the idea of a common playbook for digital assets. It has a very strong component around stablecoins. Specifically, the regulations call for strict authorization and disclosure. They also need strong reserve management practices.
Stablecoins that surpass the daily limits are subject to additional scrutiny. Thus, the European Banking Authority (EBA) places rigid regulations. This amount is more than 200 million euros per day. The rules also apply to one million transactions per day.
This regulatory certainty is actively enticing new entrants. Ultimately, it helps to develop a more mature crypto market today. The market is becoming safer for everybody involved. A lot here depends on the mainstreaming of crypto finance.
Stablecoins are becoming financial instruments with regulations. These assets provide strong legal guarantees to the users. Therefore, banks are becoming more active. Institutional investors are entering the market today.
This clarity is also a point of attraction to Fintech companies. Thus, the action taken by ODDO BHF is of major significance. It demonstrates a belief in the new regulatory regime. The banking sector clearly has a clear path forward now.
The large size of the bank gives credibility to the EUROD token. This launch further ratifies the MiCA rules. In conclusion, the European digital asset space is fast evolving. This will guarantee a stable future for regulated crypto finance.