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MiCA revolutionizes the stablecoin market in Europe

The European Union’s Markets in Crypto-Assets Regulation (MiCA) sets new standards for the regulation of stablecoins, introducing a clear legal framework for their issuance and use across the EU. Stablecoins, cryptocurrencies linked to traditional assets such as government-issued currencies, are designed to maintain a stable value, eliminating the volatility typical of other cryptocurrencies like Bitcoin.

One of the key areas regulated by MiCA is the issuance and management of stablecoins, which are gaining importance in both private and business transactions. These new rules impose strict requirements on issuers regarding transparency and risk management, aimed at preventing market manipulation.

Issuers must cease issuing non-euro stablecoins if they exceed one million transactions or €200 million in value per day.

Stablecoin issuance under scrutiny by MiCA – new requirements for issuers

MiCA introduces a set of stringent guidelines for stablecoin issuers operating in the EU. These regulations prioritize investor protection and operational transparency. A key change is the restriction on issuing stablecoins tied to currencies other than the euro. Issuers must cease issuing non-euro stablecoins if they exceed one million transactions or €200 million in value per day.

Additionally, stablecoin issuers must ensure adequate financial reserves and regularly report the status of their backing to supervisory authorities. Failure to meet these conditions may result in sanctions, including the suspension of stablecoin issuance.

MiCA – a boost for the growth of the European stablecoin market

The introduction of MiCA is seen as a crucial step towards supporting innovation while ensuring that the rapidly growing stablecoin sector is subject to effective regulatory oversight. By establishing clear guidelines, the EU aims to strengthen its position as a global leader in crypto-asset regulation, potentially encouraging more stablecoin issuers to base their operations in Europe.

By establishing clear guidelines, the EU aims to strengthen its position as a global leader in crypto-asset regulation, potentially encouraging more stablecoin issuers to base their operations in Europe.

What does the future hold for stablecoins in Europe?

The European stablecoin market is evolving rapidly, driven by the introduction of MiCA. Financial institutions and banks such as Deutsche Bank and Banking Circle are exploring the possibility of launching their own stablecoin solutions. Meanwhile, companies like PayPal are already using stablecoins to facilitate business transactions, demonstrating their growing importance in everyday financial operations.

In the coming years, the adoption of stablecoins in Europe is expected to increase. MiCA provides stability, transparency, and security for both issuers and users, which will undoubtedly contribute to increased trust and engagement in the stablecoin market from both consumers and businesses.

Do you want to learn more about stablecoin regulations in Europe? Contact our team to get detailed information about MiCA and its impact on your business. We also regularly publish articles on legal changes on our blog – check out the latest posts and stay updated!

Author team leader DKP Legal Anna Cichoń
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