#EU New Regulations Boost Euro Stablecoin Development#

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The MiCA regulation, which came into effect on December 30th in the EU, could potentially boost the development of euro-denominated stablecoins. JPMorgan argues that MiCA's requirement for stablecoin issuers to hold substantial reserves in European banks and obtain trading licenses will prompt EU exchanges to adjust their offerings, favoring compliant stablecoins like Circle's EURC. Non-compliant stablecoins, such as Tether, face challenges, as evidenced by Tether's discontinuation of its EURT stablecoin and delisting from multiple EU exchanges. Nevertheless, Tether remains a "dominant force" in the global stablecoin market and enjoys widespread use in Asian markets. Tether's investment in MiCA-compliant stablecoin issuers indicates its commitment to maintaining a presence in the EU.

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The MiCA regulation, which came into effect on December 30th in the EU, could potentially drive the development of euro-denominated stablecoins. In a research report, JPMorgan pointed out that MiCA requires stablecoin issuers to hold substantial reserves in European banks and obtain trading licenses. This will encourage EU exchanges to adjust their products and favor compliant stablecoins, such as Circle's EURC. Non-compliant stablecoins like Tether, on the other hand, face challenges. For instance, Tether was forced to discontinue its EURT stablecoin and delist from several EU exchanges. Although Tether remains a "dominant force" in the global stablecoin market, it is widely used in less regulated markets like Asia and has invested in MiCA-compliant stablecoin issuers to maintain its presence in the EU. Overall, the implementation of MiCA will drive the development of euro-denominated stablecoins and promote the regulation and application of stablecoins in the EU financial market.

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EU MiCA regulation may promote the development of euro-denominated stablecoins

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MiCA regulation requires stablecoin issuers to hold large reserves in European banks and obtain trading licenses

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MiCA regulation may lead to compliant stablecoins (such as Circle's EURC) gaining an advantage, while non-compliant stablecoins (such as Tether's EURT) face challenges

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Tether and other stablecoin issuers may maintain their presence in the EU by investing in stablecoin issuers that meet MiCA standards

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