Circle, the company behind stablecoin USDC, has become the first company to receive a stablecoin issuance license under the European Union's (EU) new MiCA regulation, paving the way for the expansion of the stablecoin market in the region .
According to the latest information from CEO Jeremy Allaire, Circle has officially received an Electronic Money Institution (EMI) license from the French regulator, allowing the company to issue and manage stablecoins USDC and EURC (formerly EUROC) in the European market. The license will take effect from July 1, 2024, affirming Circle's leading position in expansion efforts.
BREAKING NEWS: @Circle announces that USDC and EURC are now available under new EU stablecoin laws; Circle is the first global stablecoin issuer to be compliant with MiCA. Circle is now natively issuing both USDC and EURC to European customers effective July 1st.Details… pic.twitter.com/isNBumoi3e
— Jeremy Allaire – jda.eth (@jerallaire) July 1, 2024
Initiated in September 2020 and officially approved by the European Parliament in April 2023, MiCA is considered the world's first comprehensive legal framework dedicated to the field of digital assets. MiCA sets strict requirements on risk management, information security, and transparency in operations. MiCA's goal is to create a “level playing field” for cryptocurrency businesses, while protecting investors and promoting innovation.
This license marks an important turning point for the stablecoin market in Europe, which is facing many uncertainties after MiCA introduced strict regulations on how this asset type can be used. For example, under the EU framework, companies have a daily issuance limit of $215 million in transaction value. Previously, some trading platforms such as Bitstamp delisted Tether's stablecoin EURT due to compliance concerns.
Circle receiving an EMI license and MiCA compliance could be strategically important for the company to gain market share in Europe and even challenge Tether, the world's largest stablecoin issuer. The departure of EURT on several exchanges has created a market gap for Circle's USDC, especially since the company was the first to receive a MiCA license.
Besides, Circle is also planning to move its legal headquarters from Ireland to the US before the IPO. Upcoming US stablecoin regulations could cement the company's position as a global stablecoin force.
USDC is currently the second largest stablecoin in the market, accounting for about 20% of the total global stablecoin supply, according to data from The Block Data. By receiving the license to operate under MiCA, Circle is expected to further consolidate its leading position in the stablecoin market, while contributing to the widespread adoption and popularity of stablecoins in the economy. number.
Even so, USDC still has a long way to go to surpass Tether in terms of market capitalization. USDT currently holds the number one position with 113 billion USD, while USDC only has 32 billion USD. At the time of writing, USDC has not yet been able to surpass its peak of $55 billion in June 2022.
Capitalization of USDC issued by Circle / Source: Coingecko
However, with a pioneering advantage in MiCA compliance and ambitions to expand the global market, Circle has a great opportunity to close the gap with Tether and assert its leadership position in the stablecoin market.