In a significant regulatory move, the European Union has authorized ten firms to issue stablecoins under the Markets in Crypto-Assets (MiCA) regulations, excluding Tether, the world’s largest stablecoin issuer. The approval allows these companies to operate within the EU’s strict regulatory framework, facilitating the issuance of euro-pegged and US dollar-pegged stablecoins across the region.
The authorized firms include Banking Circle, Circle, Crypto.Com, Fiat Republic, Membrane Finance, Quantoz Payments, Schuman Financial, Societe Generale, StabIR, and Stable Mint. Collectively, they have launched ten euro-pegged stablecoins and five US dollar-pegged stablecoins.
Tether’s absence from the list is notable, given its $141 billion market capitalization. The lack of regulatory approval has prompted crypto platforms to begin delisting USDT for EU-based users, potentially impacting its market dominance in the region.
MiCA Paves the Way for Regulated Crypto Services
MiCA, the EU’s comprehensive regulatory framework for crypto-assets, is gradually reshaping the digital finance landscape in Europe. In addition to approving stablecoin issuers, the European Securities and Markets Authority (ESMA) has authorized 11 Crypto-Asset Service Providers (CASPs) across Germany, the Netherlands, and Malta. These providers can now offer trading, exchange, execution, custody, and transfer services within the EU’s regulatory guidelines.
The MiCA regulations aim to harmonize crypto-asset rules across the European Economic Area (EEA), providing a clear legal framework to boost investor confidence while enhancing consumer protection. A MiCA license enables companies to “passport” their services across all 30 EEA countries, making it crucial for firms seeking to expand their market share in Europe.
Race for Market Share Intensifies
With the regulatory landscape rapidly evolving, competition among crypto firms is intensifying as they race to secure MiCA licenses. The approval of Circle, a leading issuer of the USDC stablecoin, could pose a challenge to Tether, especially with the ongoing delisting of USDT in the EU.
The absence of Tether raises questions about the company’s regulatory strategy and future positioning in Europe’s crypto market. Meanwhile, the newly authorized entities would capitalize on the opportunity, leveraging their regulatory approval to expand their services across the region.
As MiCA gradually takes effect, the regulatory race is set to redefine the competitive dynamics of the crypto industry in Europe, with firms striving to adapt to the new standards and capture emerging market opportunities.
