What to know:
- EU’s MiCA rules could benefit euro denominated stablecoins, the report said.
- JPMorgan noted that under the new regulations only compliant stablecoins can be used as trading pairs in regulated markets.
- Tether remains a dominant force in the global stablecoin market, the bank said.
As a crypto investor, I’ve been closely watching the developments surrounding the EU’s Markets in Crypto-Assets (MiCA) regulations. These regulations, effective from December 30, could potentially give a significant boost to stablecoins denominated in euros, as suggested by JPMorgan in their research report released on Wednesday.
According to analysts, under the new MiCA regulations, only stablecoins that comply with the rules will be allowed for trading on regulated marketplaces. As a result, European exchanges are modifying their services to accommodate this change.
Due to compliance, stablecoins like Circle’s EURC have become stronger, while non-compliant ones, such as Tether’s EURT, have encountered difficulties, according to a statement from a Wall Street bank.
As an analyst, I’d rephrase that statement like this: In my field, I refer to stablecoins as digital assets that aim to maintain a consistent worth. Typically, they are linked to the U.S. dollar, but other currencies and commodities such as gold can also serve as their basis.
According to the report, under the revised regulations, companies like Tether that issue stablecoins will need to keep substantial funds in European banks and acquire necessary trading licenses.
Due to this development, Tether is ending its European Tether (EURT) stablecoin, and various European exchanges have removed Tether’s USD-pegged token (USDT) from their platforms, as reported by JPMorgan.
The issuer of the stablecoin announced in November that they planned to discontinue their euro-backed stablecoin. Users will have the option to exchange their tokens for up to a full year.
Despite facing these hurdles, Tether continues to be a significant player in the worldwide stablecoin sector, according to the bank’s statement. It’s particularly popular in Asian markets due to fewer regulations.
Tether’s decision to invest in European Union (EU)-compliant stablecoin providers like Quantoz Payments underscores its dedication to remaining active within the EU, according to the report.
The company said in December that it had also invested in European stablecoin issuer StablR.
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2025-01-10 13:37