Starting June 30, the European Union’s Markets in Crypto Asset (MiCA) regulations will go into effect, impacting stablecoins, or cryptocurrencies typically pegged to a stable asset like the U.S. dollar.
The new regulations, passed last year in a historic vote, are expected to levy a cap on stablecoins, restricting how the cryptocurrencies can be used in everyday transactions. There will be daily cap of 1 million transactions per day for purchasing things or buying services in stablecoins. This limit applies whether the payments happen directly on the blockchain or through regular payment methods. By applying this new rule, the 27-country bloc is hoping to protect the euro and “safeguard the monetary system,” according to CoinDesk.
“[People will need to stop issuing and using] non-EU, euro-denominated stablecoins – if they are over a certain threshold,” Robert Kopitsch, secretary-general of Blockchain for Europe, told CoinDesk about the consequences of the rule change. “And that creates a problem because 99% of the stablecoins market is in [U.S. dollars].”
Tether and Circle, two of the largest stablecoin issuers in the world, are among the firms directly impacted by the new stablecoin rules.
Scroll to Continue
Crypto exchanges monitoring the legal changes are already delisting stablecoin tokens on their platforms to comply with Europe’s new regulations. On June 26, days before MiCA rules went into effect, crypto exchange Bitstamp announced that it had delisted the Euro Tether (EURT) stablecoin. Other exchanges like Binance, Kraken, OKX, and Uphold also delisted the stablecoin Tether.
“Bitstamp will not list any new [electronic money tokens] that don’t meet MiCA requirements, nor will it engage in any marketing of them,” Bitstamp said.
Others point out that Europe’s uniform rules around crypto will increase regulatory clarity and transparency in Europe, while also offering greater consumer protection. “While there may be some initial inconvenience and higher barriers for new entrants, the end result will hopefully be a safer and more reliable environment for crypto users in the E.U. and the [European Economic Area],” Jón Egilsson, former chairman of the supervisory board of Icelandic Central Bank, told Cointelegraph.
“With the introduction of more regulations, confidence in the cryptosphere as a whole will grow,” Sergei Gorev, YouHodler risk manager, echoed in an interview with TheStreet Crypto.
