Stablecoin issuer Circle announced on Monday (1st) that it has obtained a license and approval to issue stablecoins under the “Markets in Crypto Assets” (MiCA) regulatory framework. Circle CEO Jeremy Allaire stated at a press conference in Paris that Circle is the first global stablecoin issuer to comply with the MiCA regulatory framework, with the rules coming into effect on July 1st. Circle will be able to issue USD Coin (USDC) and Euro Coin (EURC) under this regulatory framework.
This move follows Circle’s gradual compliance with regulatory requirements in the stablecoin sector. Last December, Circle secured an Electronic Money Institution (EMI) license in France and appointed a local business lead. Now, the company will launch MiCA-compliant stablecoins across Europe through its French entity.
According to data from The Block, USDC ranks as the second-largest USD-backed stablecoin, accounting for 20% of the total stablecoin supply as of June 28th.
MiCA, established by the EU, is a comprehensive regulatory framework aimed at establishing unified cryptocurrency regulation among its member states. Approved by the European Parliament in April 2023, MiCA is currently being phased in with related rules.
As part of this framework, it imposes stricter regulatory requirements on stablecoins issued in the region. Other provisions, including rules specific to stablecoins, will be gradually implemented, with full compliance required by the end of this year starting from June 30th.
Stablecoin issuers operating outside the EU but serving EU residents also need to comply with MiCA regulations. However, uncertainties remain regarding how MiCA applies to these assets.
Concerns have been raised by some stablecoin issuers about MiCA’s implications for these assets. Last month, Paolo Ardoino, CEO of Tether, issuer of stablecoin USDT, told The Block that MiCA “includes several problematic requirements” that could complicate operations for stablecoin issuers and increase operational fragility and risks for EU-approved stablecoins.
Crypto exchange Binance had earlier announced in early June that it would begin restricting the use of “unauthorized” stablecoins in Europe by June 30th, though it did not specify Tether’s USDT stablecoin. Binance CEO Richard Teng clarified later on the X platform that Binance would not immediately delist any unauthorized stablecoins but would limit their availability to users in the European Economic Area (EEA) to certain products.
On Monday, Richard Teng shared news on social media platforms about USDC becoming a regulated stablecoin in the European Economic Area and confirmed that USDC would continue to be offered to their EEA users across Binance’s products.
Sources:
– Jeremy Allaire
– The Block
– Richard Teng
