The new EU regulation on cryptocurrencies, MiCA, officially takes effect on December 30, and is expected to drive the development of euro-denominated stablecoins, according to reports from #JPMorgan .
Euro-Denominated Stablecoins Benefit
Strict MiCA requirements: According to the new regulations, only stablecoins that fully comply with standards #MiCA are allowed to be used as trading pairs on regulated markets in the EU.
Market changes: This forces exchanges in the EU to adjust their stablecoin listings, creating an advantage for compliant stablecoins like Circle's EURC, while non-compliant stablecoins like Tether's EURT struggle.
Pressure on stablecoin issuers
Reserve and licensing requirements: MiCA requires stablecoin issuers to maintain large reserves at European banks and to be licensed to operate.
Tether withdraws: Tether has announced the cessation of the issuance of the EURT stablecoin and allows users to redeem tokens within 12 months. This has led to USDT being delisted from many exchanges in the EU.
Tether Remains Dominant Globally
Despite facing hurdles in the EU, #Tether remains a 'giant' in the global stablecoin market, particularly popular in Asia - where regulations are less stringent.
Strategic investment: Tether has invested in MiCA-compliant stablecoin issuers like Quantoz Payments and StablR, demonstrating its commitment to maintaining a presence in the EU.
Stablecoin: The Future of Cryptocurrency?
Stablecoins, a type of cryptocurrency designed to maintain stable value, are often pegged to the USD or other assets like gold, playing a crucial role in the cryptocurrency ecosystem.
Conclusion:
The MiCA law is reshaping the stablecoin market in the EU, opening up significant opportunities for euro-denominated stablecoins. This is a major step towards promoting transparency and stability in the cryptocurrency sector, while also posing a significant challenge to non-compliant stablecoin issuers.
