The EU’s Markets in Electronic Money Regulation (MiCA) for stablecoins is now in effect, with only regulated stablecoins allowed for use in the bloc. The new legal framework requires a series of actions for many companies and users who want to issue or use stablecoins in the EU.
According to YouHodler CEO Ilya Volka, it is now important for stablecoin users in the EU to convert non-compliant stablecoins to regulated ones like USDC.
Ilya Volka – CEO YouHodler
Volka said:
“This transition ensures maximum stability and will not affect the value of digital assets.”
Volka added investors holding stablecoins in the EU should not transfer their stablecoins to foreign platforms.
“By using a MiCA compliant platform, users will be protected by the latest market regulations. Using unregulated stablecoins on foreign platforms can be very dangerous as it exposes users to legal and financial risks, including the possibility of authorities freezing assets,” CEO YouHodler added.
Volka stressed that converting unregulated stablecoins to regulated ones will not be a loss.
“For example, when you convert USDT to USDC, your assets will remain in the same dollar amount.”
Tether is concerned about EU MiCA regulations
In early June, Binance announced that it would begin restricting access to “unauthorized” stablecoins in its 27-country trading bloc by the end of last month. However, Tether CEO Paolo Ardoino expressed concerns about MiCA and its impact on stablecoins.
“Tether has been actively engaged in regulatory technical standard consultations over the past months and remains concerned that MiCA has some problematic requirements.
These requirements not only make the job of stablecoin issuers extremely complex, but also make EU-licensed stablecoins extremely vulnerable and risky to operate. As with any regulatory framework of this scale, further discussions on technical implementation standards are essential to bring clarity to the market under certain regulations,” he added.
In addition to licensing requirements, MiCA introduces additional uncertainty through its stablecoin issuance restrictions. According to Article 23 of the law, companies cannot issue additional stablecoins within the bloc if their stablecoins exceed the threshold of 1 million daily transactions as a medium of exchange or the total daily transaction volume exceeds 200 million euros (about $215 million). la).
EU MiCA Framework To be an example for other jurisdictions
Despite the challenges, MiCA is an example for other jurisdictions to learn and follow, Volka said. Coincover Head of Strategy Eleanor Gaywood concurred, saying that implementing the MiCA provision for stablecoins would put the EU at the forefront of the transition to embrace innovation from the crypto sector .
“Over the past few weeks, we have seen some exchanges delist certain stablecoins ahead of the implementation deadline, which to me shows that crypto companies are still confused about how to comply with the new rules. Going forward, I hope ESMA works with the industry to help companies comply rather than regulate through enforcement action such as fines or penalties,” Gaywood added.
On June 30, MiCA was partially implemented for crypto service providers and its identity verification and anti-money laundering requirements were introduced. Full compliance with the bloc’s new regulatory framework will be required by December.
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