EU Enforces New Stablecoin Regulations Amid Market Shifts

Summary:
The EU has introduced stringent new regulations for stablecoins as part of the Markets in Crypto-Assets (MiCA) framework, which came into effect on June 30. These rules, while providing much-needed clarity, impose heavy restrictions on dollar-denominated stablecoins, which dominate global trading volumes. Circle has registered as an electronic money institution under these regulations, becoming the first compliant issuer in the EU.
Critics like Katalin Tischhauser of Sygnum argue the rules are overly restrictive, banning decentralized and yield-bearing stablecoins, and capping transactions. Major crypto exchanges like Binance and Kraken have started delisting non-compliant stablecoins like Tether’s USDT. Christian Walker of Stablecoin Standard believes that while the rules may pose challenges, they are crucial for industry maturation and could set an international benchmark.
PwC’s Olivier Carré and Deutsche Bank’s Marion Laboure see the regulations positively, noting enhanced oversight and structured financial sector groundwork. The rules require issuers to be authorized and meet rigorous standards by June 30, 2024, and impose obligations on crypto asset service providers to ensure compliance, consumer protection, and market transparency.