Jeremy Allaire, the co-founder and CEO of Circle, made a groundbreaking announcement on July 1. Circle has become the first stablecoin issuer in the European Union (EU) to receive regulatory approval under the EU’s comprehensive Markets in Crypto-Assets (MiCA) regulatory framework. This means that Circle’s USDC and EURC stablecoins are now compliant with the new rules, eliminating concerns that investors would have to redeem their stablecoins or switch to other digital assets to comply with the regulations.
Allaire also revealed that Circle has chosen France as its European headquarters. France’s progressive approach to digital asset regulation and Circle’s strong relationship with the French Prudential Supervision and Resolution Authority (ACPR) were the driving factors behind this decision. Allaire further emphasized the historical significance of the EU’s regulatory overhaul, highlighting that it is the first comprehensive regulatory framework for digital assets, representing a major milestone for the asset class.
As the EU’s regulatory shift approached, several exchanges took steps to adapt their stablecoin policies and product offerings. Uphold, a crypto exchange and custodial platform, announced in June that it would delist six stablecoins for its European users, including Tether (USDT), Dai (DAI), TrueUSD (TUSD), Gemini dollar (GUSD), Pax dollar (USDP), and Frax Protocol (FRAX). Bitstamp followed suit by delisting Tether’s EURT stablecoin, despite being one of the first exchanges to list the digital fiat token. Binance also responded to the new stablecoin regulations by implementing a “sell-only” strategy for certain stablecoin products in the European market. Instead of delisting stablecoins, Binance classified the fiat equivalents as compliant or non-compliant and imposed limitations on certain market features for European customers.
In conclusion, Circle’s regulatory approval in the EU under the MiCA framework is a significant milestone for the company and the digital asset industry as a whole. It demonstrates the progress made by the asset class and reaffirms the importance of regulatory frameworks in fostering a secure and compliant environment for investors.