As a seasoned crypto investor with a deep understanding of the European market, I view the impending MiCA regulations as both a challenge and an opportunity. The caps on transaction volumes and value for stablecoin issuers will undoubtedly shake up the current landscape, forcing players like Tether and Circle to reconsider their strategies.
Starting from June 30, the EU’s MiCA (Markets in Crypto Assets) regulations will put an end to the unrestricted issuance of stablecoins in European markets. These regulations will impose limits on transaction volumes and values for asset-referenced stablecoins that are not pegged to the Euro, and which have more than one million transactions or facilitate the transfer of over $215 million. As a result, such stablecoins must be discontinued within the EU.
In the EU, transactions eligible for consideration with stablecoins like those issued by Tether and Circle will encompass both online and offline purchases settling in goods and services, on-chain and off-chain. These issuers must adapt their business strategies once more due to substantial daily trading volumes reaching billions of dollars for their dollar-backed coins.
Additionally, a large proportion of stablecoins currently available are tied to the US dollar. As a result, coin issuers might need to rethink launching their leading stablecoin offerings in this market and instead consider introducing assets pegged to the Euro. Although stringent regulations are being imposed, they aim to protect the Euro from potential devaluation caused by other currencies.
As a crypto investor, I’ve come to realize that creating Euro-pegged stablecoins isn’t as simple as it seems. In the European Union, I would be required to obtain an e-money issuance or banking license, which is a lengthy and complex process. On top of that, I would need to demonstrate to regulators my ability to control transaction volumes and values in accordance with the mandate.
In the given context, transactions refer to exchanges of money for goods and services, as well as peer-to-peer transfers. However, certain transactions, such as buying e-money tokens or moving value between exchange accounts and personal wallets, should be excluded from regulatory tracking. Neglecting these types of transfers could create significant challenges for issuers and potentially limit their ability to operate within the bloc.
Despite intending to carry out operations within the EU, Tether remains committed to meeting MiCA’s requirements in their entirety upon the regulation’s implementation. The company aims to secure its e-money license by the end of this month and subsequently introduce its Euro-pegged stablecoin—EURC—and USDC, in accordance with MiCA’s guidelines.
Image by succo from Pixabay
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2024-06-29 19:25