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Circle is the first global stablecoin issuer to become compliant under the European regulation MiCA (Markets in Crypto Assets), which was enacted today.
What's the scoop?
- Stablecoin Issuance: Having received a digital asset regulatory license in France in December, Circle can now issue its stablecoins USDC and EURC under MiCA's regulatory framework. USDC is the second-largest USD-pegged stablecoin, comprising ~20% of the total stablecoin supply.
- MiCA Overview: The Markets in Crypto Assets law, approved in April 2023, requires stablecoins in the EU to meet increased regulatory requirements, like 1:1 reserve ratios, liquid reserves, and supervision from the European Banking Authority, starting June 30. Issuers outside the EU serving EU residents must also comply.
- Industry Reactions:
Tether and other issuers have raised concerns about MiCA, saying it could complicate the issuance process and make them more expensive to operate. 
Binance plans to restrict access to "unauthorized" stablecoins in Europe without delisting them on spot markets.
Bankless Take:
Circle, which recently moved its legal headquarters from Ireland to the US, may receive a strong competitive edge due to MiCA, potentially increasing its market share if Tether does not align itself with the law’s requirements. That said, Tether continues to dominate with a market cap over 3x that of Circle’s, bolstered partly by its recent integration on TON. Its popularity has not stopped platforms from delisting it, though, due to MiCA, with Bitstamp removing USDT last week, joining other exchanges like OKX and Uphold, which have done the same.
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