Four stablecoins soon to be regulated in Europe

Wednesday, March 6, 2024

In just under four months' time, stablecoins will need to have the compulsory regulatory licences to continue operating in Europe. A handful of players stand out.

"The upturn in the markets naturally brings new opportunities," smiles Aude Vicaire, managing director of Salvus, a French start-up that is preparing the launch of a euro stablecoin.

Salvus says it is seeing growing interest among businesses looking to benefit from an asset that enables euro payments to be made directly on blockchain. "The customers we're targeting work in insurance or traditional finance, and they're looking for solutions that can be used fairly quickly," says Aude Vicaire.

Salvus may not tell you anything, but the start-up was the first to obtain an electronic money institution (EME) approval from the Autorité de contrôle prudentiel et de résolution (ACPR) with a view to issuing a stablecoin, as we revealed at the end of November. According to our information, its stablecoin should be ready by the end of the first half of the year.

Salvus is one of the few European entities to benefit from this approval, which will be mandatory from 30 June next to issue a stablecoin in Europe. Its first use cases will focus on cross-border B2B payments, such as operating flows between subsidiaries of the same group or with suppliers.

As evidence of the growing interest in the subject, the start-up counts among its competitors players such as SG-Forge, Société Générale's blockchain subsidiary, which has been rolling out its CoinVertible stablecoin (€10 million in circulation) for over a year.

The latter is currently only being used for experimental purposes, but it is destined for a promising future. SG-Forge should have no trouble obtaining EME approval. The structure is also the only company to hold approval as a service provider for digital assets (PSAN), the most demanding licence to operate in cryptos.

"Many players are calling for a regulated settlement tool that allows transactions to be made on the blockchain without switching back to traditional money," explains a Luxembourg player that is preparing an offering tailored to this type of demand.

All eyes are now on Circle, the US stablecoin giant that issues the USDC ($29 billion in circulation), which offers a euro equivalent, the EURC (€49 million in circulation). The company, which has set up its European headquarters in Paris, also says it is in the process of obtaining EME approval.

It is set to be joined by a fourth player, the Lugh stablecoin (€2.8 million in circulation), which has been carried by the Casino supermarket group since 2021.

Also read: 13 major stablecoins compared and analysed

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This analysis is not investment advice. It has been prepared without taking into account your personal situation, particularly your financial situation, risk profile, and investment objectives.

Before investing in any product, investors should fully understand the risks involved and consult their own legal, tax, financial, and accounting advisors.

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