BaFin prohibits Ethena GmbH's USDe offer: Regulatory uncertainties for the stablecoin market in Germany

BaFin prohibits Ethena GmbH's USDe offer: Regulatory uncertainties for the stablecoin market in Germany

Regulatory measures by BaFin against stablecoin provider Ethena

On March 21, 2025, the Federal Financial Supervisory Authority (BaFin) made significant regulatory decisions affecting the stablecoin USDe from Ethena GmbH. These measures raise essential questions about the future regulatory treatment of similar products in Germany and the European Union.

BaFin orders the USDe offer to be discontinued

BaFin has banned the offering of the US dollar-pegged stablecoin USDe in Germany. The reason for this is the token's classification as electronic money (e-money), the issuance of which requires legal approval in accordance with the Payment Services Supervision Act (ZAG). Since Ethena GmbH, a company based in Berlin, does not have the necessary permission, the offer was stopped.

The company had previously sought approval under the new European regulatory guidelines for crypto-assets, known as Markets in Crypto-Assets Regulation (MiCAR). However, the application for approval was rejected by BaFin and the stablecoin is now classified as e-money, which brings with it additional regulatory requirements.

Ethena's response and impact on operations

Ethena has confirmed that approval under MiCAR has not been approved and is exploring alternative regulatory frameworks to maintain operations in Germany. In a statement on Platform X, the company made it clear that the BaFin decision had no impact on USDe's existing listings. The processes for minting and redemption via Ethena (BVI) Limited therefore remain undisturbed. Ethena also assured that the stablecoin USDe remains fully collateralized.

“Contrary to some reports, no assets have been frozen and all are available for redemption,” Ethena explained.

The company plans to adjust its terms and conditions in the coming week to comply with new regulatory requirements.

Technical background of the USDe stablecoin

The USDe stablecoin is pegged directly to the US dollar, but features an innovative technology: Ethena acquires Ethereum (ETH) and hedges this position by selling ETH futures. With this mechanism, the company claims to have created a high-yield stablecoin that can provide users with benefits in a volatile market.

Corporate structure and regulatory implications

Ethena operates in multiple jurisdictions, and while the German subsidiary is directly affected by BaFin's decision, most Mint operations are conducted through Ethena (BVI) Limited, which is not directly affected.

The classification of USDe as e-money has far-reaching regulatory implications and reflects the growing oversight of the crypto sector. With the MiCAR framework, Germany and the European Union are pursuing strict requirements for crypto assets, which require corresponding adjustments from providers.

This decision by BaFin could also have a signaling effect on similar stablecoin projects in the European Union that are either already active or are planning to do so. Crypto asset providers should prepare for increased regulatory scrutiny and obtain the necessary approvals in a timely manner.

Overall, the BaFin decision highlights the challenges faced by crypto providers and the need to proactively consider regulatory frameworks.