#EU's New Regulations Boost Euro Stablecoin Development#
Hot Topic Overview
Overview
The MiCA regulation, which came into effect on December 30th in the EU, could potentially boost the development of euro-denominated stablecoins. JPMorgan believes that MiCA's requirement for stablecoin issuers to hold substantial reserves in European banks and obtain trading licenses will favor compliant stablecoins, such as Circle's EURC, while posing challenges for non-compliant ones like Tether's EURT. Tether has already discontinued its EURT stablecoin and delisted it from multiple EU exchanges, although it remains dominant in Asian markets. Tether has also invested in MiCA-compliant stablecoin issuers, indicating its commitment to maintaining a presence in the EU.
Ace Hot Topic Analysis
Analysis
The implementation of the EU's new MiCA regulation could drive the development of euro-denominated stablecoins. In a recent research report, JPMorgan pointed out that MiCA regulations require stablecoin issuers to hold significant reserves in European banks and obtain trading licenses, which will give compliant stablecoins, such as Circle's EURC, an advantage in the regulated market. Non-compliant stablecoins, such as Tether, face challenges, as evidenced by Tether being forced to discontinue its EURT stablecoin and delisting from multiple EU exchanges. Although Tether remains a "dominant force" in the global stablecoin market, its investment in MiCA-compliant stablecoin issuers, such as StablR and Quantoz Payments, indicates its commitment to maintaining a presence in the EU. Overall, the implementation of MiCA regulations will create a more favorable environment for compliant euro-denominated stablecoins and could potentially drive their development.
Public Sentiment · Discussion Word Cloud
Public Sentiment
Discussion Word Cloud
Classic Views
EU MiCA regulation may promote the development of euro-denominated stablecoins, as only compliant stablecoins can be used as trading pairs in regulated markets.
MiCA regulation requires stablecoin issuers to hold large reserves in European banks and obtain trading licenses, which has posed challenges for some non-compliant stablecoin issuers.
Stablecoin issuers like Tether have started investing in MiCA-compliant stablecoin issuers to comply with MiCA standards, indicating their commitment to maintaining a presence in the EU.
Despite the challenges posed by MiCA regulation for some stablecoin issuers, Tether remains the "dominant force" in the global stablecoin market and is widely used in less restrictive Asian markets.