While the implementation of all provisions of the Markets in Crypto-Assets (MiCA) directive has closed gaps related to the activities of unlicensed exchanges in Europe, it has also caused significant disruptions in the stablecoin ecosystem due to its restrictive approach to licensing issuers.
Patrick Hansen, Senior Director of EU Strategy and Policy at Circle, expressed concern about the state of the regulated stablecoin ecosystem in Europe and how the current regulatory framework leaves European customers outside the protection system provided by MiCA.
Hansen explained that MiCA has resulted in licenses being issued for 35 e-money tokens from 21 issuers, indicating interest in this area and a willingness of companies to invest and launch stablecoins to the market. "Real institutional players are betting on this area, and many major EU corporations will enter the market in the next 12 months. Implementation is going well for local issuers. The development momentum is real," he emphasized.
However, MiCA's strict provisions have led most major stablecoin issuers, including Tether, to fail to meet its operational requirements, with only USDG, USDC, and EURC having passed the compliance check.
"The others remain outside MiCA's scope—which means EU users are either left unprotected or denied access. For a regulatory framework designed to bring global stablecoin markets under EU supervision, this is a significant gap," he noted.
Hansen believes that the upcoming review of MiCA should address this issue, as the system should encompass global stablecoin activities and allow local e-money token issuers to expand beyond Europe. He suggests adopting a more pragmatic approach to open up opportunities for foreign issuers to operate without facing the same rules as their local counterparts.
On May 20, the EU Directorate-General for Financial Stability, Financial Services, and Capital Markets Union opened a public consultation to determine "whether the current regulatory framework is fit for purpose." The process will last until September 30, and one of its sections focuses specifically on e-money tokens and their issuers.
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