Circle, the renowned fintech firm behind the USDC stablecoin, has secured an Electronic Money Institution (EMI) licence, enabling the issuance of dollar- and euro-pegged crypto tokens in the European Union. This milestone allows Circle to issue these tokens under the Markets in Crypto Assets (MiCA) regulatory framework.
This strategic development positions Circle as a new player in the EU’s digital asset market, serving a population of 450 million across 27 nations. Stablecoins, such as Circle’s USDC, play a crucial role in digital asset infrastructure by facilitating trading on exchanges and increasingly being used for transactions and remittances. With a USD 32 billion market cap, USDC is the second-largest stablecoin, following Tether’s USDT, which stands at USD 110 billion.
Circle’s subsidiary, Circle Mint France, will issue the euro-denominated EURC stablecoin within the EU, alongside USDC. This move is particularly significant as some exchanges have delisted euro-denominated stablecoins ahead of MiCA’s rules implementation on 30 June 2024, including Tether’s EURT.
The MiCA framework underscores Europe’s proactive approach to regulating stablecoins amid concerns over the entry of big tech firms into financial markets, such as Meta’s Diem (formerly Libra) initiative. Circle’s head of policy highlighted that MiCA represents the culmination of five years of policy development, influenced in part by earlier industry initiatives like Libra. The regulatory environment under MiCA emphasizes compliance and consumer protection, marking a shift from previous regulatory leniencies.