Circle has made a significant milestone by becoming the first global stablecoin issuer to obtain an Electronic Money Institution (EMI) license under the Markets in Crypto Assets (MiCA) regulatory framework in the European Union (EU). This achievement positions Circle ahead of its competitors in the stablecoin market, including Tether’s USDT.
Stablecoins play a crucial role in the digital asset market, enabling trading on exchanges and serving as a means for transactions and remittances. With a $32 billion market capitalization, Circle’s USDC is the second-largest stablecoin, trailing behind Tether’s $110 billion USDT. The gap between the two stablecoins has been widening, and obtaining the EMI license gives Circle a strategic advantage in capturing market share within the EU, which consists of 27 nations and 450 million people.
Circle Mint France, armed with the EMI license from the French banking regulatory authority, will be responsible for issuing the euro-denominated EURC stablecoin and USDC within the EU. This move comes after some crypto exchanges delisted euro-denominated stablecoins, such as Tether’s EURT, in response to MiCA’s stablecoin regulations that came into effect on June 30.
The development of MiCA’s stablecoin regulations was influenced by concerns surrounding big tech companies, such as Meta’s Diem (formerly Libra) initiative, entering the financial markets. Dante Disparte, Circle’s head of policy, who was involved in the Libra project, emphasized the significance of MiCA in shaping the regulatory landscape for digital assets. He highlighted the shift towards a more stringent regulatory environment, signaling the end of operating in regulatory grey areas and expecting unfettered access to consumers and market participants.
In a recent interview, Disparte reflected on the evolution of regulatory policies in Europe, stating, “MiCA is both vindicating of the industry and its permanence, but it’s also clear that there is no more shortcuts, at least not in the third-largest economy in the world. Gone are the days where you could operate in a regulatory haven or in the shadows and then expect to have liberal and free access to consumers and market participants.”
The compliance with MiCA’s stablecoin regulations positions Circle as a pioneer in the industry and underscores the company’s commitment to operating within a transparent and regulated framework. As the digital asset market continues to evolve, regulatory compliance will play a crucial role in shaping the future of stablecoins and other crypto assets within the EU and beyond.