Circle Becomes Europe’s First Licensed Stablecoin Issuer Under MiCA

Highlights:

• Circle secured the EU’s E-Money license under MiCA regulations.
• The EMI license allows Circle to issue USDC and EURC in the EU.
• This positions Circle to potentially surpass Tether as Europe’s leading stablecoin issuer.

Jeremy Allaire, co-founder and CEO of crypto firm Circle, announced on July 1 that the firm became the first global stablecoin issuer to secure an Electronic Money Institution (EMI) license under the EU’s Markets in Crypto Assets (MiCA) regulatory framework. Circle received the EMI license from France’s banking industry regulator, the Autorité de Contrôle Prudentiel et de Résolution (ACPR).

BREAKING NEWS: @Circle announces that USDC and EURC are now available under new EU stablecoin laws; Circle is the first global stablecoin issuer to be compliant with MiCA. Circle is now natively issuing both USDC and EURC to European customers effective July 1st.

Details… pic.twitter.com/isNBumoi3e

— Jeremy Allaire – jda.eth (@jerallaire) July 1, 2024

Circle Expands EU Stablecoins

With this approval, the platform will issue its USD Coin (USDC) and Euro Coin (EURC) stablecoins in the EU, adhering to MiCA’s stablecoin regulatory requirements. Users can mint and redeem these assets via the Circle Mint France. In December, Circle obtained a digital asset regulatory license in France. Allaire said Circle selected France as its European headquarters because of France’s progressive digital asset regulations and Circle’s partnership with the French ACPR.

We have achieved a significant early milestone in establishing our European regulatory platform by securing a conditional DASP Registration in France and appointing a Head of French Operations, Ms. Coralie Billmann. Read more 👇https://t.co/IAHY4L1hw8

— Circle (@circle) December 21, 2023

Stablecoins are cryptocurrencies tied to traditional assets, such as government-issued currencies like the US dollar. Investors use them to mitigate the volatility seen in other cryptocurrencies like bitcoin. Additionally, stablecoins facilitate rapid trading in and out of cryptocurrencies without the need for reliance on fiat currencies held in bank accounts.

Launched in September 2018 by Circle and cryptocurrency exchange Coinbase, USDC has grown to become the world’s second-largest stablecoin. According to CoinGecko, it currently boasts $32.4 billion in circulation. This places USDC just behind Tether’s USDT, which leads with $112.7 billion in circulation.

MiCA Framework: A New Era for Stablecoins

Last year, the EU passed a comprehensive law regulating cryptocurrency companies’ operations. MiCA officially took effect in May 2023, but the stablecoin provisions were only approved last week. These provisions impose trading limitations on certain stablecoins, especially US-denominated ones.

According to MiCA, companies must stop issuing non-euro denominated stablecoins used as a “means of exchange” if these stablecoins exceed 1 million transactions or 200 million euros in transactions per day. As a French-registered EMI, Circle can now provide its services, such as minting and redeeming USDC through Circle Mint, to customers across the European Union. MiCA enables crypto businesses to operate in one EU country and expand their services to other markets within the bloc.

Allaire stated:

“Our adherence to MiCA, which represents one of the most comprehensive crypto regulatory regimes in the world, is a huge milestone in bringing digital currency into mainstream scale and acceptance.”

Crypto asset service providers must meet all remaining MiCA regulatory requirements by December 30, 2024. Following this deadline, crypto firms have until July 2026 to achieve full compliance with MiCA.

Is Circle Positioned to Upend Tether?

Circle’s EMI license and MiCA compliance could be key for entering Europe’s market and competing with Tether. Speculation arose regarding Tether’s future in Europe following the delisting of its euro-denominated offering, Tether EURT, by platforms like Bitstamp.

Uphold also stopped supporting USDT and other dollar-pegged stablecoins. As a vacuum emerges and Circle secures the first MiCA stablecoin license, the company could potentially replace Tether as the leading stablecoin issuer in several regions.

📖Uphold's delisting of major stablecoins like Tether and Dai in Europe isn't just another headline, it's a shift triggered by MiCA's regulatory framework.

The stricter rules for fiat-backed stablecoins and the outright ban on algorithmic ones are set to reshape the European…

— Darien Advisors (@Darien_Advisors) June 18, 2024

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