What You Need to Know About New MiCA Stablecoin Rules
On July 1, the highly anticipated Markets in Crypto-Assets Regulation (MiCA) will finally come into force, bringing huge change to the landscape of stablecoins and other digital assets within the European Union (EU).
MiCA represents one of the most comprehensive regulatory frameworks for crypto-assets globally, aiming to provide legal certainty, protect investors, and push innovation in the rapidly evolving digital finance space.
Recently, Uphold, and several other exchanges have made a move to adapt to the regulations by de-listing DAI, FRAX, GUSD, USDP, TUSD, and USDT.
Europe is embarking on an experiment to bring digital assets and crypto market participants within the regulatory perimeter for the first time, said Jason Allegrante, chief legal and compliance officer at Fireblocks.
“One area that the regulations currently get wrong is stablecoins,” highlights Allegrante. “Creating standards for issuers and reserves is a good idea, as is closing the market to those issuers or instruments that do not meet minimum standards,” adds Allegrante.
He explains MiCA also introduces caps on the number of stablecoin transactions that can occur within a set period.
“This will prove to be a major impediment to adoption and a disadvantage to EU-based stablecoins if left uncorrected in the next iteration of rules,” said Allegrante.
MiCA defines stablecoins as asset-referenced tokens (ARTs) and electronic money tokens (e-money tokens). ARTs are pegged to a basket of assets, such as currencies or commodities, while e-money tokens are linked to a single fiat currency.
The regulation sets guidelines on the issuance, operation, and supervision of these tokens, ensuring they maintain a stable value and uphold investor trust.
The rules will start
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