Ethena's USDe in Germany: The MiCA Situation Explained

On March 21, 2025, BaFin (German Federal Financial Supervisory Authority) rejected Ethena's application for authorization as the issuer of USDe stablecoin, citing "serious deficiencies" in the application.

What happened?

MiCA (Markets in Crypto-Assets Regulation) is an EU wide and comprehensive "regulation", not a "directive". This means all authorities across the 27 EU member states must directly implement it.

Ethena in Germany submitted its application on July 29, 2024. One day before the MiCA transitional deadline for stablecoins authorization requirement. BaFin rejected the application.

The rejection are likely to be from Ethena's synthetic model itself, which uses derivatives and staking rather than the traditional fiat reserves that MiCA standards were designed for. Plus, MiCA requires a comprehensive "white paper" and detailed plans.

What does this mean for USDe holders?

Good news for users:

• German users can still sell, trade, transfer, and swap USDe (since these operators are not in Germany)

• The only restriction is on redemption—something most users aren't doing regularly anyway

• Users outside Germany (including Thailand) are 100% unaffected

What's next?

Ethena is now exploring more crypto-friendly regions like the US or Asia for future development.

Stay tuned for our upcoming article explaining who MiCA affects and the key compliance dates!