MiCA approves 10 stablecoin issuers in EU

The European Union (EU) has approved ten firms to issue stablecoins under its Markets in Crypto-Assets (MiCA) regulatory framework.

According to Patrick Hansen, senior director of EU strategy and policy at Circle, the approved issuers are Banking Circle, Circle, Crypto.Com, Fiat Republic, Membrane Finance, Quantoz Payments, Schuman Financial, Societe Generale, StabIR, and Stable Mint.

These firms have issued ten euro-pegged and five U.S. dollar-pegged stablecoins.

Tether (CRYPTO:USDT), the largest stablecoin with a market capitalisation of over $141 billion, was notably absent from the list.

This absence highlights the tension between regulation and market opportunities.

The stablecoin provisions of MiCA came into effect in June, while the broader framework was fully implemented in December.

The EU has set a strict deadline for the removal of stablecoins that fail to comply with its new regulations, requiring crypto firms to delist non-compliant tokens by the end of March 2025.

A Tether spokesperson expressed disappointment with the delistings, characterising them as hasty and unwarranted.

Natalia Łątka, director of public policy and regulatory affairs at Merkle Science, suggested that MiCA regulations might isolate European markets by discouraging foreign firms and potentially prompting local crypto companies to relocate outside the EU to avoid the costly framework.

MiCA classifies stablecoins into two categories: electronic money tokens (EMTs), pegged to a single fiat currency, and asset-referenced tokens (ARTs), which derive value from a combination of currencies, assets, or cryptocurrencies.

To issue stablecoins in the EU under the EMT category, issuers must be authorised as either credit institutions or electronic money institutions and must have their whitepapers approved.

Under MiCA, stablecoin issuers must offer redemption to all token holders, allowing them to exchange stablecoins at par value.

At least 30% of reserves must be held in deposits with credit institutions, rising to 60% for significant issuers, and the remaining reserves must be invested in secure, low-risk assets.

A key regulatory measure is the prohibition of interest on stablecoins by issuers and crypto-assets service providers (CASPs), which is aimed at discouraging stablecoins from being used as stores of value.