Stablecoins Are Waking Up Wirecard-Scarred Germany

GERMAN FINANCIAL REGULATOR BaFin doesn't seem to be hyped up when it comes to stablecoins — blockchain-issued cryptocurrencies designed to mimic the dollar — whose potential in payments has whipped up enthusiasm on the stock market.

- Bloomberg

After a first warning against a Frankfurt-based stablecoin issuer called Ethena, which BaFin accused of serious organizational shortcomings and breaches of European Union crypto rules, the regulator last week instructed it to wind up business.

No doubt BaFin is trying to make up for the spectacular collapse of payments processor Wirecard AG five years ago, the biggest fraud in German history. Back then, BaFin was very much in a hyped-up mood, defending a national financial-technology darling instead of digging into whistleblower allegations about its operations that proved correct. The regulator's new boss has been cracking the whip since, and not just in stablecoins: Its 2023 pressure on France's Worldline SA for failing to take action against fraudsters is still reverberating today as the company faces a probe in Belgium over new allegations (though it has denied wrongdoing).