ODDO BHF, First European Bank to Bring Stablecoin Reserves Onto Its Balance Sheet: “This model will become a reference”

Guy de Leusse: We’ve been watching the growth of the crypto ecosystem for some time, a market that’s becoming more active and now regulated by the same authorities that oversee banks. That convergence has helped to de-demonize the space and made it clear that this isn’t a parallel system anymore.

The idea was to enter this space with a simple product that we fully control: a stablecoin, which we view as the equivalent of bank cash, but circulating on the blockchain.

Initially, EUROD is being offered to trading platforms, with Spanish exchange Bit2Me as our first partner. It’s already being used there for trading and portfolio risk management, and the issuance technology is provided by Fireblocks.

These first steps allow us to build partnerships within the ecosystem and prepare for what we see as the next stage: the tokenization of financial assets. At the same time, our crypto-focused client base has grown significantly in recent years, and demand for regulated stablecoin services from a trusted bank has increased accordingly.

Not at all. We don’t see deposit flight as a significant risk for ODDO BHF. That concern mainly applies to large retail or commercial banks with day-to-day payment accounts. Our business is wealth management and savings, not transaction banking. Clients typically maintain long-term, stable deposits with minimal outflows.

Our strategy is proactive rather than defensive. It’s about offering our clients an onchain equivalent of cash and anticipating future demand, particularly for products gaining traction through decentralized finance.

In the short term, exchanges — both centralized and decentralized — are the natural starting point. Traders can use EUROD for pair trading, hedging, and de-risking portfolios. But the potential goes well beyond trading.

We see significant opportunity in cross-border payments, especially along corridors connecting several regions where we are already active. These remain costly and inefficient under current rails. Stablecoins can enable real-time settlement, lower fees, and greater transparency — benefits the traditional system still struggles to deliver.

We’re also exploring retail-facing use cases through partners that offer crypto payment cards, enabling users to pay in euros directly from their EUROD balance without leaving the blockchain ecosystem. And in countries outside the eurozone, particularly those facing high inflation, a euro-denominated stablecoin can serve as a simple hedge against currency volatility. It’s a powerful driver for the internationalization of the euro.

Our approach is intentionally gradual. Before moving into decentralized finance, we first want to ensure EUROD is widely accessible and liquid. That means getting it listed on several centralized and decentralized exchanges so it can be easily traded, integrated into existing ecosystems, and used by both retail and institutional clients. To achieve this, we’ve partnered with Flowdesk, a leading French market maker, which will help ensure depth and stability in the order books from day one.

Once that foundation of liquidity is in place, our goal is to progressively expand EUROD’s use cases, starting with regulated DeFi environments. We see DeFi as a natural next step for stablecoins, provided it is developed within a compliant framework. In that context, EUROD could be integrated into liquidity pools, used as collateral, or serve as a settlement asset in tokenized markets.

Ultimately, the ambition is to make EUROD a genuine market stablecoin with broad circulation, not just a niche pilot, and to position ODDO BHF among the leading euro issuers as the market scales from a few hundred million to several billion euros in capitalization.

It was by far the simplest and most natural structure for us. Since ODDO BHF already holds a full banking license, there was no need to create a separate entity or seek an additional e-money authorization. By issuing the stablecoin directly from the bank’s balance sheet, we could leverage our existing regulatory framework, governance, and liquidity management systems, all of which are already approved and supervised by the ACPR.

This approach avoids unnecessary complexity. We didn’t have to set up ring-fenced accounts or a new structure, and instead, the stablecoin is fully integrated into the bank’s asset-liability management. The funds received from EUROD issuance are treated as deposits, appear on our balance sheet, and are subject to the same prudential, liquidity, and equity requirements that apply to the rest of our operations.

We don’t see it that way. At this early stage, we maintain a very high level of liquidity to guarantee same-day redemptions, and we can manage EUROD entirely within the traditional banking framework. That gives us access to interbank liquidity and, if necessary, central-bank facilities, just as we would with any other liability on our balance sheet.

In essence, nothing fundamentally changes, except that the deposit now takes the form of a token onchain. The counterparty risk of EUROD is therefore the counterparty risk of ODDO BHF itself: a regulated European bank operating under strict prudential supervision and with direct access to central-bank money.

We believe this model will ultimately become a reference point in Europe, as regulators and institutions recognize that stablecoins integrated into a bank’s balance sheet offer greater security, transparency, and resilience than segregated structures outside the banking perimeter.

For now, our model is B2B2C: our direct counterparties are exchanges, not retail users. These partners act as distributors and are responsible for KYC and AML under the same standards that apply to us. Our role is to carefully select them and ensure compliance alignment.

In DeFi, it’s different — we’re not there yet. But we’ll evolve within MiCA’s framework, which doesn’t require knowing every holder on the secondary market. Our smart contract already includes institutional-grade compliance features such as blacklists and the ability to freeze tokens at the request of authorities, in line with current market practices adopted by major issuers.

We also rely on Chainalysis to monitor wallet risks and maintain on-chain oversight consistent with banking standards.

We’re still in the early days. As tokenization scales and financial instruments move onchain, we believe stablecoins issued directly by banks will evolve into tokenized commercial money — fully regulated, seamlessly integrated into financial infrastructure, and indistinguishable from traditional deposits except for their form factor. EUROD is our first step in that direction.