Circle executives made the claims after the company became the first stablecoin issuer to receive a license in the European Union under MiCA.
As the EU’s Markets in Crypto Assets regulation gets underway, Circle’s EU Strategy and Policy Director Patrick Hansen and Chief Strategy Officer Dante Disparte expect a “transformative” year ahead for the European crypto market.
“More such announcements will follow as the year progresses and the reality sets in that the EU is now a zero-tolerance market for loosely regulated ‘internet funny money,’” they added. Foreign, unregulated exchanges will face significant restrictions, according to the strategists, making it “exceedingly difficult, if not impossible, to operate on a reverse solicitation basis.” Conversely, entities that can overcome the regulatory hurdles are likely to gain market share in the region, they said.
However, uncertainty remains regarding the dual categorization of e-money tokens as crypto-assets and e-money, the final publication and application of technical standards, the specific disclosure and liability obligations for exchanges, and how crypto assets are allowed to interact with the real economy, Hansen and Disparte said.
While certain MiCA requirements on stablecoins such as the amount of reserves to be held as bank deposits may need to be revisited to avoid unintended consequences, the U.S. and UK should leverage the EU's experience and adopt stablecoin regulations promptly to maintain global competitiveness, they argued.
USDC is the second largest USD-pegged stablecoin, drawing in 20% of the total $168.3 billion stablecoin supply, according to The Block's data dashboard.
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