Circle Gets Approval To Issue Stablecoin In EU Under Bloc’s Strict Rules

Circle, a crypto firm, receives an EMI licence to issue USDC and becomes the first stablecoin issuer in the world to conform with the EU’s MiCA.

TakeAway Points:

  • Circle receives an e-money licence in France, making it the first stablecoin issuer in the world to adhere to the EU’s MiCA standards.
  • Through Circle Mint, Circle is now able to extend its services throughout the EU by issuing USDC and EURC tokens.
  • With $32.4 billion in circulation, USDC is the second-largest stablecoin in the world, after Tether’s $112.7 billion.

Circle hits key Regulatory Milestone

Cryptocurrency firm Circle has announced a significant regulatory achievement, becoming the first global stablecoin issuer to comply with the European Union’s stringent Markets in Crypto-Assets (MiCA) framework. Circle, known for its USD Coin (USDC) stablecoin, has been granted an electronic money institution (EMI) license by France’s banking regulator, Autorite de Controle Prudentiel et de Resolution (ACPR). 

This license allows Circle to issue stablecoins in compliance with MiCA’s regulatory obligations, marking a pivotal step in the firm’s mission to build a compliant and well-regulated infrastructure for digital currencies.

MiCA’s Impact on Stablecoins

The MiCA framework, which officially came into force in May 2023, represents the world’s first comprehensive law governing cryptocurrency operations. It sets out detailed rules for investor protections and platform integrity, with specific provisions for stablecoins approved just last week. These provisions are particularly stringent, imposing limits on non-euro denominated stablecoins used as “means of exchange.” Under Article 23 of MiCA, companies must halt the issuance of such stablecoins if they exceed 1 million transactions or a value of over 200 million euros ($215.2 million) per day.

Circle’s adherence to MiCA is a “huge milestone in bringing digital currency into mainstream scale and acceptance,” according to Jeremy Allaire, co-founder and CEO of Circle. 

The firm can now offer its services, including the ability to mint and redeem USDC via Circle Mint, not just in France but across the entire European Union. This is possible due to MiCA’s “passporting” provision, which allows crypto businesses to operate in one EU country and extend their services to other markets within the bloc.

Circle’s Strategic Position

Launched in September 2018 by Circle and crypto exchange Coinbase, USDC is the second-largest stablecoin globally, with $32.4 billion worth of tokens in circulation, according to CoinGecko data. It trails only Tether’s USDT, which has $112.7 billion in circulation. Circle’s new EMI license and MiCA compliance position the company strategically to expand its market presence in the EU, offering a compliant and regulated stablecoin option to investors and businesses.

Circle’s move comes at a time when stablecoins are increasingly seen as a crucial component of the cryptocurrency ecosystem. They provide a way for investors to avoid the volatility of other cryptocurrencies like Bitcoin and facilitate quick trading in and out of digital assets without relying on fiat currencies stored in bank accounts. 

“Our adherence to MiCA, which represents one of the most comprehensive crypto regulatory regimes in the world, is a huge milestone in bringing digital currency into mainstream scale and acceptance.” Allaire stated.

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