Circle Inaugurates MiCA Regulation with its USDC and EURC

The MiCA regulation had barely come into force via its sections relating to the issuance of stablecoins when Circle, the company issuing USDC, announced that it had become the first issuer of stablecoins in the world to have complied with these new rules imposed on a European scale.

Stablecoin issuer Circle has become the first company in the world to align its stablecoins with the European Union’s MiCA regulation.

The MiCA regulation, which came into force on June 30, 2024, sets out a comprehensive framework for the regulation of crypto-assets in the EU. Among other things, the regulation includes specific provisions for the issuance and circulation of stablecoins.

To comply with MiCA, Circle has obtained approval from the French Prudential Control and Resolution Authority (ACPR) to operate as an electronic money institution (EMI). This approval allows Circle to issue and redeem its USDC and EURC stablecoins in the EU.

According to a press release from Circle, the company’s Circle Mint solution, which is designed for businesses that want to integrate USDC and EURC into their operations, is now available to Circle’s European customers.

“As digital assets become increasingly integrated into traditional finance, it is essential that we establish strong and transparent structures to promote trust and adoption,” said Dante Disparte, Circle’s chief strategy officer and head of global policy, in a statement.

“Today’s announcement reinforces our commitment to building a more inclusive and compliant future for internet finance.”

What does this mean for USDC in Europe?

As of today, all USDC and EURC stablecoins circulating in the EU are compliant with the MiCA regulation.

To align with MiCA, Circle has agreed to certain requirements, including a mandate to fully insure its euro stablecoin at parity. As such, 100% of the reserves used to back the EURC are hosted through Circle France.

USDC will continue to be minted from the United States, but it will now also be minted simultaneously from France to service the European market.

With respect to major European market institutions, whether exchanges, market makers, brokers or institutions, banks, companies and individuals, Circle directly mints and redeems USDC and EURC through Circle Mint France.

These stablecoins are now under the direct supervision of the ACPR, which is responsible for ensuring the proper application of the rules induced by the arrival of MiCA, “the world’s first and most comprehensive crypto-asset regulatory regime,” according to Allaire.

As Allaire noted, European citizens who hold USDC can continue to use it as they wish, whether to exchange it, transact with it or use it in decentralized finance (DeFi).

“For the vast majority of European users who buy, hold or sell USDC or EURC on an exchange or other crypto asset service provider product, nothing changes,” he said.

A complex but necessary process for Circle

Circle’s alignment with the MiCA regulation was made possible with the support of the law firm De Gaulle Fleurance.

Anne Maréchal and Julie Bader, who contributed as associate lawyers for this purpose, told Cryptoast that the compliance process proved to be complex due to the still-nascent aspect of MiCA, requiring a period of adaptation for both the companies wishing to align with MiCA and the committed regulators.

However, these efforts should pay off, as Circle benefits from the status of being the first stablecoin issuer to be regulated on a European scale thanks to the MiCA regulation. In this regard, Maréchal told us that it is the players who understand the importance of regulation who will succeed in the European Union.

“Finance needs leaders to ensure investor safety. Regulation is inevitable. The future of finance will be regulation,” she said.

With the race now open for stablecoin issuers wishing to benefit from the European market, it remains to be seen which company will follow in the footsteps of the giant Circle and its USDC stablecoin.

Its first rival in this segment of the market will not be Tether and its USDT, however, as its CEO Paolo Ardoino pointed out “serious risks for stablecoins regulated in the EU.”

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