For some time now, the European Union has been thinking about putting in place new legislation on the market for classic cryptos and stablecoins. Recently, the MiCA regulation has been the subject of an agreement that is far from pleasing the crypto lobbyist associations.
What does the MiCA regulation say about stablecoins?
Currently, the EU is settling technical details for the implementation of the MiCA regulation. Cryptocurrency lobbyist associations want EU lawmakers to explain this proposal to them. They do not want this regulation to come into force, because it involves restrictions on stablecoins related to a foreign currency.
In fact, with the MiCA regulation, dollar-backed stablecoins will be banned in the 27 countries of the European Union (EU). Specifically, this proposal imposes restrictions on the issuance and use of stablecoins linked to a non-local currency. Thus, it does not affect stablecoins backed by an official currency of an EU Member State.
The Blockchain for Europe and the Digital Euro Association recently sent a letter to the EU Council. The two associations want the MiCA regulation to be reviewed, as it could prevent the development of large projects of stablecoin. That said, USDT, USD Coin (USDC) and Binance USD (BUSD) could be banned within the EU. However, these stablecoins account for a large part of the cryptocurrency exchange volumes on a global scale.
The Blockchain for Europe and the Digital Euro Association stated in their letter: “ The three largest stablecoins in terms of trading volume are likely to be banned in the EU from 2024, due to quantitative limits on the issuance and use of electronic money tokens denominated in foreign currencies within the framework of MiCA. ».
According to two crypto lobbyist associations, restricting the use of foreign currency-backed stablecoins in the eurozone “would cause the crypto markets to seize up”. We could then see a significant leak of cryptocurrency-related activities outside the EU.
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Far from having cooled my ardor, an unsuccessful investment in 2017 on a cryptocurrency only increased my enthusiasm. I therefore resolved to study and understand the blockchain and its many uses and to relay information related to this ecosystem with my pen.