The flexibility of MiCA allows the issuance of stablecoins saving costs, but increasing risks.
Direct connection to the bank could destabilize the stablecoin due to financial problems.
EUROD, the stablecoin with 1:1 parity with the euro, launched by the Franco-German bank ODDO BHF and the cryptocurrency exchange Bit2Me, is generating debate. It’s a “double-edged sword,” warns Patrick Hansen, director of European Union (EU) strategy and policy at Circle.
The cryptoasset was launched in October 2025, directly linked to the bank’s balance sheet, seeking deep integration with decentralized finance (DeFi), as reported by CriptoNoticias at the time.
This strategy, although celebrated by Guy de Leusse, deputy chief operating officer of ODDO BHF, for “not using fractional reserves” to maintain absolute liquidity, is seen by Hansen with a more cautious stance. He qualifies this structure as “less secure” than backed stablecoins of segregated reserves, as let clear in your newsletter.
For the launch of the stablecoin, the bank took advantage of the flexibility allowed by the Cryptoasset Markets Law (MiCA) that regulates the sector in the EU. This helped it avoid the creation of a specific subsidiary, speeding up the inclusion of the crypto asset in the bank balance sheet.
This tactic becomes crucial as MiCA regulations prohibit the direct distribution of returns in Europe, making DeFi the only way for euro stablecoins to offer profitability to their users.
However, Hansen warns about the risk of bidirectional contagion, where The bank’s financial problems could destabilize the stablecoinand vice versa. He adds that this characteristic of the European regulatory framework contrasts with that of the United States.
Hansen cites the GENIUS law, and highlights that it requires strict segregation of stablecoin reserves issued in dollars.
In that sense, Hansen’s concern is that, despite Oddo BHF’s promise of 1:1 support, direct integration into the bank’s balance sheet could introduce systemic risks.
Personally, I think this structure is less safe than an EMT [token de dinero electrónico] traditional with full reserve support. But with Oddo’s initiative and the growing number of banking stablecoin projects in Europe, it is probably only a matter of time before others follow suit. We’ll see what happens.
Patrick Hansen, Director of EU Policy and Strategy at Circle.
In short, Hansen highlights the difference between bank stablecoins and those issued by companies like Circle in Europe. This company is behind EURC, the stablecoin backed 1:1 by the euro, which registered an explosive growth of 2,727% in trading volume between July 2024 and June 2025. This advance far exceeds the modest 86% of USDC, another stablecoin from the same issuer, but anchored to the US dollar, which has a significantly larger capitalization.
This scenario with EUROD and Hansen’s warnings reflect the tension between European regulatory innovation and the growing competition between this type of cryptoassets.
The coexistence of banking models such as ODDO BHF and Circle with EURC, both under MiCA, but with different support approaches, will mark the evolution of the euro stablecoin market and its impact on the digital asset ecosystem.