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Ethena Labs has withdrawn from its regulatory ambitions in the EU, ending efforts to get approval for its USDe stablecoin under MiCA rules.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.
Alex is Editor-in-Chief of Coindoo and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.
