Odaily Planet Daily News: Driven by increasing regulatory transparency and sustained market demand, banks across the United States and Europe are intensifying their efforts to issue stablecoins. The introduction of the EU Crypto Asset Market Regulation (MiCA) and the growing global interest in blockchain-based payment solutions have prompted traditional financial institutions to compete with established crypto companies like Tether Holdings. Many European banks have begun deploying their own stablecoins to capture a market share that is believed to generate billions of dollars in profits annually. Société Générale's digital asset subsidiary SG-Forge has now opened its euro stablecoin to retail investors. Similarly, Frankfurt's Oddo BHF SCA and London's Revolut are also considering launching euro stablecoins, while another issuer supported by Deutsche Bank's asset management division, DWS, is expected to launch its euro stablecoin in 2025. SG-Forge CEO Jean-Marc Stenger stated that more banks will adopt bank-issued stablecoins. SG-Forge is currently discussing with about ten banks as potential partners or users of SG-Forge's stablecoin issuance technology. Likewise, global payment technology company Visa Inc. is also collaborating with banks like BBVA to create stablecoin solutions using blockchain. Visa's cryptocurrency chief Cuy Sheffield mentioned that the company is currently in negotiations with institutions in Hong Kong, Singapore, and Brazil. In the United States, with discussions around the regulatory environment, some banks like JPMorgan Chase have begun testing blockchain-based payment systems. Although JPMorgan has used its deposit token, JPM Coin, for internal transfers, it does not have the open connectivity characteristic of stablecoins, meaning it cannot be accessed through any crypto wallet. Naveen Mallela, co-head of JPMorgan's digital asset division Kinexys, stated that JPM Coin is expected to gain more market recognition over the next three years. He noted that stablecoins and tokenized deposits could coexist as different payment methods. However, there are still some questions that may pose challenges for U.S. banks. It remains unclear what types of reserves can back stablecoins and whether these deposits qualify for federal insurance, issues that could cause some confusion during financial turmoil. The MiCA regulatory framework will come into effect on December 30, 2024, marking an important milestone for stablecoin issuers in Europe. MiCA ensures that stablecoin providers have the appropriate licenses to operate in the EU and sets out guidelines regarding reserve management and investor protection. Circle's USDC has been approved under MiCA and can now be used more widely across the region. However, market leader Tether Holdings has yet to mention plans to obtain a euro stablecoin license. Experts say this could open possibilities for banks and their competitors to enter this space. Meanwhile, the European Central Bank has expressed concerns about the potential impact of stablecoins on traditional banking. A recent study by the ECB found that converting retail deposits into stablecoins could undermine banks' liquidity coverage ratios. As commercial banks begin to issue stablecoins, central banks are also actively developing CBDCs. These government-backed digital currencies may eventually compete with or replace bank-issued stablecoins in wholesale payment systems. Libre Capital CEO Avtar Sehra pointed out, "Everyone is exploring some form of commercial bank digital currency. But many may prefer consortium coins." Reportedly, several banks are considering forming alliances to create blockchain-based shared tokens for broader interoperability and efficiency. (CoinGape)