The EU's MiCA (Markets in Crypto-Assets) regulation is set to enforce standards for stablecoin issuers, but actually, the key milestones are already happening. The regulation became law in June 2023, and stablecoin provisions started being enforced on June 30, 2024. By 2026, we can expect full compliance and potentially more clarity on how these regulations will shape the stablecoin market .

Key Requirements for Stablecoin Issuers Under MiCA:

- Full Reserve Backing: Stablecoin issuers must maintain fully backed reserves, held in highly liquid assets like cash or government bonds.

- Transparency and Audits: Quarterly audits are mandatory to ensure full transparency of reserve holdings.

- Transaction Limits: Strict transaction limits apply to prevent systemic risks.

- Authorization: Stablecoin issuers must obtain authorization from the European Banking Authority (EBA) before launching in the EU market.

The EU has already approved 10 stablecoin issuers under MiCA regulations, excluding Tether. Approved firms include Banking Circle, Circle, and (link unavailable) This move aims to ensure consumer protection, financial stability, and innovation in the crypto sector .

How do you think MiCA regulations will impact the future of stablecoins in the EU?