Circle announced that USDC and EURC have obtained MiCA issuance licenses! Will USDT lose the EU market?

The EU's crypto-asset market law "MiCA" proposed in 2019 has officially entered into force on June 30, making the EU an important step towards becoming a jurisdiction with tailor-made and comprehensive cryptocurrency regulations.

The most discussed thing recently is that the "MiCA" bill stipulates that in terms of stablecoins, if non-EU, euro-denominated stablecoins exceed a certain threshold (more than 1 million payment transactions per day, or daily transaction volume exceeds 200 million euros), the issuance needs to be stopped or the use is prohibited. Therefore, USDT issuer Tether and USDC issuer Circle need to obtain the necessary licenses before July to operate legally.

Circle CEO: USDC and EURC have complied with the "MiCA" Act

And yesterday (1), Circle CEO Jeremy Allaire posted on Already compliant with the EU's new "MiCA" Act and has officially started issuance on July 1: Circle announced today that USDC and EURC have now been launched in accordance with the EU's latest Stablecoin Act, Circle is the first to comply with the "MiCA" Act As a stablecoin issuer, Circle will issue USDC and EURC to European users starting from July 1st.

In addition, Jeremy added: Circle France is now our regulated headquarters in Europe... We have 100% reserves for the stablecoins issued by ourselves, and the USDC owned by European customers can still be exchanged globally... "MiCA" The introduction of the bill will also foster a highly competitive market for digital currencies in Europe, and financial institutions including banks will also adopt euro stablecoins...

Will USDT lose the EU market?

But on the other hand, Circle’s biggest competitor, the current leading stablecoin USDT issuer Tether, has not made any announcement so far claiming to have obtained EU license. On the contrary, Tether's US dollar stablecoin and euro stablecoin have been delisted by many exchanges a few days ago:

• OKX exchange announced in late March this year that it would delist USDT related trading pairs in Europe. At that time Some people speculate that it may be related to the new regulatory regulations of the "MiCA" Act
• In May, Bloomberg reported that the US cryptocurrency exchange Kraken is also evaluating whether to cancel support for USDT under the "MiCA" Act
• On June 18, New York cryptocurrency exchange Uphold announced that since the MiCA bill is about to take effect on June 30, it has decided to stop supporting multiple stablecoins from July 1, including USDT, DAI , FRAX, TUSD, etc.
• On June 26, three days before the "MiCA" bill came into effect, Bitstamp also announced that it would delist Tether's EURT and other stablecoins before June 30.

Tether is worried about the operational risks brought by "MiCA"

In April this year, Tether CEO Paolo Ardoino said that Tether has been actively participating in discussions on the regulatory technical standards of the EU's "MiCA", but is still worried that the bill will contain some Questionable Requirements: Not only would these requirements make the job of stablecoin issuers extremely complex, they would also make EU-licensed stablecoins extremely fragile and operationally risky.

It is still unclear whether Tether has encountered difficulties in the process of applying for the "MiCA" license. Whether USDT will fall behind in the European market and change the current competitive landscape of the stablecoin market is worthy of our continued attention.

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