On July 1, Jeremy Allaire, co-founder and CEO of Circle, announced that the firm had achieved a significant milestone by becoming the first stablecoin issuer in the European Union to gain regulatory approval under the EU’s comprehensive Markets in Crypto-Assets (MiCA) regulatory framework.
Circle’s USDC and EURC stablecoins are now fully compliant with the new MiCA regulations, effective immediately. This move has alleviated concerns among investors who feared they might need to redeem their stablecoins or transfer funds to other digital assets to remain compliant. Allaire emphasized the importance of this achievement, noting that Circle’s stablecoins are now officially recognized and regulated within the European Union.
Circle’s European Headquarters in France
Allaire also announced that Circle has chosen France as the company’s European headquarters. He cited France’s progressive stance on digital asset regulation and Circle’s strong working relationship with the French Prudential Supervision and Resolution Authority (ACPR) as key reasons for this decision.
“We are thrilled to establish our European base in France, a country that has shown a remarkable commitment to fostering innovation in the digital asset space,” said Allaire. “Our collaboration with the ACPR has been instrumental in achieving this regulatory milestone.”
The Significance of MiCA
Reflecting on the historical significance of the European Union’s regulatory overhaul, Allaire highlighted the profound progress that digital assets have made since their inception. The MiCA framework represents the first comprehensive regulatory approach for digital assets globally, underscoring the maturation of the asset class.
“The entire concept of fiat digital currency did not really even exist outside of very early crypto circles. The concept of seeing major global laws that enshrined stablecoins into the financial system was inconceivable,” Allaire remarked.
Impact on Crypto Exchanges
In anticipation of the European Union’s regulatory shift, several crypto exchanges have adjusted their stablecoin policies and product offerings:
- Uphold: In June, crypto exchange and custodial platform Uphold announced it would delist six stablecoins, including Tether (USDT), Dai (DAI), TrueUSD (TUSD), Gemini dollar (GUSD), Pax dollar (USDP), and Frax Protocol (FRAX), in an email sent to its European users.
- Bitstamp: Later that month, Bitstamp delisted Tether’s EURT stablecoin, despite being one of the first exchanges to list the digital fiat token.
- Binance: Binance adopted a “sell-only” strategy for certain stablecoin products in the European market. The world’s largest centralized exchange explained that it would not delist any stablecoins for its European users at this time. Instead, it would label the fiat equivalents as either compliant or non-compliant and limit certain market features for European customers.
The European Union’s move to implement the MiCA framework has prompted significant adjustments within the crypto industry. Exchanges are re-evaluating their offerings to ensure compliance with the new rules, which aim to bring more stability and trust to the digital asset market.
Circle’s achievement in becoming the first licensed stablecoin issuer under MiCA marks a pivotal moment in the digital asset industry. This regulatory approval not only solidifies Circle’s position in the European market but also sets a precedent for other crypto firms aiming to comply with the new regulatory landscape. As the industry continues to evolve, such regulatory milestones will play a crucial role in shaping the future of digital assets.
| Exchange | Action Taken | Stablecoins Affected | Reason |
|---|---|---|---|
| Uphold | Delisted stablecoins | USDT, DAI, TUSD, GUSD, USDP, FRAX | Compliance with MiCA |
| Bitstamp | Delisted EURT | EURT | Compliance with MiCA |
| Binance | Sell-only strategy | Various stablecoins | Compliance with MiCA; labeling as compliant or non-compliant |
Featured image credit: Nick Youngson via Alpha Stock Images