EU MiCA Stablecoin Regulations Cap the Number of Transactions at One Million and the Daily Value at €200M, Effective June 30

By Shaurya Shubham – The European Union is set to implement stringent new regulations for stablecoin issuers, effective June 30.

The European Union (EU) is preparing to enforce new regulations for stablecoin issuers, which will take effect on June 30 and require them to obtain the necessary authorization to operate within the 27-nation trading bloc. These regulations are part of the broader Markets in Crypto Asset (MiCA) legislation.

Stablecoin issuers like Tether and Circle will be impacted by these rules, which also include tight restrictions on transaction volume and value. Robert Kopitsch, secretary-general of Blockchain for Europe, highlighted the challenge, stating, “Non-EU, euro-denominated stablecoins – if they are over a certain threshold – then you need to stop issuing and using them, and that creates a problem because 99% of the stablecoins market is in USD.”

According to Article 23 of MiCA, companies must stop issuing an asset-referenced stablecoin if it is used for more than 1 million transactions or if its daily value exceeds 200 million euros ($215 million). These caps are designed to prevent stablecoins from destabilizing the euro, as explained by Mark Foster, EU policy lead at the Crypto Council for Innovation.

The European Banking Authority (EBA) supports these measures to “safeguard the monetary system.” However, the EBA has yet to specify how it will calculate these values, although a consultation document suggests that transactions involving at least one party in the EU will be included. A final report on measurement methods is expected by the end of the month.

Stablecoin issuers will also face challenges in obtaining the required certification to comply with MiCA. Kopitsch noted that obtaining an e-money institution license or banking license is a “very costly, long process.” Circle, which conditionally registered as a Digital Asset Service Provider with the French Financial Markets Authority in April, is aiming to secure an e-money license by the deadline.

A Circle spokesperson stated, “Circle is committed to full compliance with EU’s MiCA regulations. We plan to onshore EURC to the EU and issue it from Circle France in a MiCA-compliant manner.” Paolo Ardoino, CEO of Tether, expressed optimism about the implementation of MiCA but highlighted the importance of balanced regulatory policies that protect consumers and support the industry's growth.

It's worth noting that press releases from the European Union's main financial authority often include warnings about the high volatility and speculative nature of cryptocurrencies. When using this tool, investors are strongly advised to proceed with extreme caution. The Central Bank also acknowledges the difficulty in ignoring cryptocurrencies due to the market's rapid growth and substantial impact on the economy.

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