Stablecoins for banks in Europe and Germany
A bank meets stablecoins as issuer of its own token, as custodian of reserves and client holdings, and as the account bank at both ends of a payment. In the EU, MiCA lets a credit institution issue an e-money token without a second license. Dated events are in the calendar below.
Issuing a stablecoin under MiCA
Under Article 48 of MiCA, only a credit institution or an electronic money institution may offer an e-money token to the public in the EU. A bank already holds the first of these licenses. It notifies a crypto-asset white paper to its supervisor and then issues the token. The holder can redeem it at par at any time and free of charge under Article 49, and Article 50 forbids paying interest on it.
The interest ban is where a bank's choice starts. A tokenized deposit stays a deposit on the bank's balance sheet and can pay interest. An e-money token is a bearer token backed by a reserve that the issuer keeps apart from its own business. Banks that want a token for corporate clients and DLT settlement compare the two before they build either.
Banks that issue euro stablecoins
Societe Generale started early. Its digital asset unit SG-FORGE launched EUR CoinVertible (EURCV) on Ethereum in April 2023 for the bank's institutional clients. From July 1, 2024, SG-FORGE restructured the token as an e-money token under MiCA and removed the whitelisting, so EURCV now moves freely between wallets. SG-FORGE holds an electronic money institution license from the French ACPR.
Other banks build together. Ten European banks, among them BNP Paribas, ING and UniCredit, formed Qivalis in Amsterdam to issue a shared euro stablecoin; the euro stablecoins page describes the consortium. In Germany, AllUnity, founded by DWS, Flow Traders and Galaxy, issues EURAU under a BaFin e-money license. German banks put more work into a deposit token: Deutsche Bank, Commerzbank, DZ Bank, UniCredit and Helaba piloted the Commercial Bank Money Token with industrial clients.
Custody, settlement and the deposit question
A bank can earn from stablecoins without issuing one. BNY is the primary reserve custodian of Ripple's dollar stablecoin RLUSD and provides the transaction banking that moves reserve cash for conversions. In the US, the GENIUS Act lets subsidiaries of insured depository institutions issue payment stablecoins, according to a Skadden analysis. A guide by Tatum sorts the bank options into own issuance, a consortium token and the integration of existing stablecoins through APIs.
The concern also runs the other way. An ECB blog post warns that interest-bearing stablecoins could draw deposits away from banks, which fund most of their lending with deposits. The ECB and stablecoins page covers that debate.
Upcoming events on stablecoins and digital money
Finance Loop and banks working on stablecoins
Finance Loop is the meeting place for bankers who decide between issuing, holding and integrating stablecoins. At Capital & Code in Frankfurt, hosted by AllUnity with Finance Loop as media partner, the Bundesbank, J.P. Morgan and Ubyx debate central bank money against deposits, tokenized deposits and stablecoins. Finance Loop supported the Bybit EU x Circle Roadshow with panels on USDC and EURC. Venturebloxx and Finance Loop prepare the report The Future of Money in Europe, with J.P. Morgan Kinexys, Commerzbank and Monerium among the contributors on how banks compete with stablecoin issuers.
Payments & Digital Money
Risk & Compliance
Can banks issue stablecoins?
Yes. In the EU a credit institution may issue an e-money token under its banking license after notifying a white paper. In the US the GENIUS Act allows subsidiaries of insured depository institutions to issue payment stablecoins.
What is the difference between a bank stablecoin and a tokenized deposit?
A bank stablecoin is an e-money token: a bearer claim backed by a separate reserve, redeemable at par, with no interest. A tokenized deposit is a bank deposit on a blockchain and stays on the bank's balance sheet. The comparison answer goes through both.
Are banks in Germany working on stablecoins?
AllUnity, founded by DWS with Flow Traders and Galaxy, issues the euro stablecoin EURAU from Frankfurt. Deutsche Bank, Commerzbank, DZ Bank, UniCredit and Helaba worked on a shared deposit token instead. The stablecoins in Germany page has the details.
Stablecoins for banks and Finance Loop
Finance Loop covers bank-issued stablecoins and deposit tokens in its Payments & Digital Money track. Finance Loop is media partner of Capital & Code, hosted by the euro stablecoin issuer AllUnity in Frankfurt, and strategic partner of the Digital Euro Association.
Finance Loop is a professional network and has the goal of driving the adoption of emerging technologies in finance, such as AI, digital payments, cloud and blockchain solutions. Finance Loop helps its members build skills and personal networks in these fields: Investment & Digital Assets, Payments & Digital Money, Digital Infrastructure & Sovereignty, and Risk & Compliance.