Ethena Pulls Stablecoin Out of Europe as Regulatory Pressure Mounts
Ethena Labs has withdrawn from its regulatory ambitions in the EU, ending efforts to get approval for its USDe stablecoin under MiCA rules.
The decision follows months of uncertainty in Germany, where the company had been operating through a local subsidiary and engaging with BaFin under transitional allowances.
Despite pushing for compliance, Ethena was ultimately blocked from offering USDe in the country. With no assets frozen and users unaffected, the firm quietly rerouted its German customer base to its international branch based in the British Virgin Islands. That entity will now issue and manage USDe outside EU oversight.
MiCA’s regulatory filter has proven too narrow for algorithmic stablecoins like USDe, which relies on crypto reserves rather than fiat backing. The framework favors tokens supported by verifiable banking assets—an area where USDe falls short, despite its popularity in DeFi.
Still, Ethena isn’t abandoning the project. It continues expanding USDe’s presence in lending protocols and introduced a proof-of-reserves program to show that its current $5 billion supply is backed by slightly more in assets. However, the reserves consist entirely of crypto—BTC, ETH, stETH, and others—not the fiat-backed structure EU regulators prefer.
In the past few months, USDe’s total supply has declined as market conditions worsened and Ethereum lost momentum. Trading volumes have dipped, and ENA, Ethena’s native token, has seen a sharp price correction—slipping back toward its pre-rally levels.
While USDe still enjoys strong usage in decentralized exchanges and its yield-bearing variant sUSDe is trading above peg, the platform’s retreat from Europe signals a broader struggle for crypto-native models to coexist with tightening regulations.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over 8 years of experience covering the crypto, blockchain and fintech industries, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics.
