Ethena was informed by Germany's BaFin of the non-approval of its MiCAR compliance application. However, USDe's stablecoin operations remain unaffected.
BaFin Rejection and Its Operational Impact
Ethena GmbH was notified by BaFin, the financial regulative authority in Germany, about the rejection of its MiCAR compliance application. This specifically affects their regulatory alignment within Germany. The rejection does not impact the operations related to USDe, a stablecoin backed by assets. Ethena is actively exploring alternative pathways for compliance and plans to revise their terms of service within the following week.
Market Standing and Expert Perspectives
Ethena USDe, ranked as the 25th largest cryptocurrency by market cap, maintains stability with fully asset-backed reserves. Its market cap stands at $5.41 billion, trading at $0.999. Experts suggest that regulatory hurdles prompt cryptocurrencies to reassess compliance strategies. As Dr. Anna Schmidt, Head of Legal at BaFin, stated: "The halt on Ethena's issuance of USDe tokens reflects our commitment to compliance and investor protection."
Future Plans and Reliable Operations of Ethena
Despite BaFin's rejection, Ethena continues stable operations with USDe. The firm is actively seeking other compliance measures and plans to update its terms of service to adapt to the changing regulatory environment. USDe's full asset backing keeps its value close to 1 US dollar, retaining user trust.
The rejection of MiCAR compliance poses a significant regulatory challenge for Ethena, yet the company continues operations and explores new compliance avenues. Future efforts will focus on maintaining USDe's liquidity and market stability.
