Circle made a significant announcement on July 1 by revealing that it had secured an e-money license from France, solidifying its position as the premier global stablecoin issuer to adhere to the EU’s Markets in Crypto-Assets (MiCA) regulations. This license, granted by the Autorité de Contrôle Prudentiel et de Résolution (ACPR), the financial regulator in France, permits Circle to distribute its stablecoins USDC and Euro Coin (EURC) throughout the European Union in accordance with the new regulatory framework that is now in effect.
Breaking New Ground
Circle CEO Jeremy Allaire expressed his enthusiasm for this achievement by stating, “Achieving MiCA compliance is a monumental step for Circle as we continue to build robust and regulated infrastructure for digital currencies. This milestone brings us closer to integrating digital currency into mainstream financial systems.” Stablecoins, like USDC and EURC, are essentially digital assets that are tied to traditional fiat currencies, providing investors with a means to escape the volatility typically associated with cryptocurrencies such as Bitcoin. Additionally, these stablecoins facilitate quick and seamless transitions in and out of crypto investments without the need to rely on fiat currency held in bank accounts.
The MiCA legislation represents a groundbreaking legal framework within the EU that governs operations within the crypto space. It includes specific provisions designed to safeguard investors and prevent market manipulation. While certain MiCA provisions related to crypto asset service providers will be enacted by the end of December 2024, companies are expected to achieve full compliance by July 2026. Noteworthy restrictions within MiCA’s stablecoin rules, recently finalized, place a cap on the daily transaction volume of non-euro stablecoins, limiting them to a maximum of 1 million transactions or 200 million euros ($215.2 million).
Having obtained its status as an electronic money institution registered in France, Circle is now positioned to deliver its stablecoin services across the entire European Union. The “passporting” feature of MiCA enables crypto businesses registered in one EU member state to operate in other states as well, ultimately facilitating broader market accessibility. Circle, which was established in 2018 and is well-known for its USDC stablecoin, has experienced considerable growth over the years. USDC currently stands as the second-largest stablecoin globally, trailing only behind Tether’s USDT. As per CryptoSlate data, there is a total of $32.4 billion worth of USDC tokens in circulation, solidifying its position as a dominant force in the stablecoin market.