With the Markets in Crypto Assets (MiCA) rules and regulations being officially implemented on 30 June, it represents a new era for how crypto is being handled in Europe. 

With this comes varying compliance elements crypto asset service providers (CASPs) must abide by in order to flourish on the continent. Most notably, cryptocurrency exchange Bitstamp had to delist Tether’s EU native EURT stablecoin as it did not meet MiCA’s e-money token guidelines. 

Under Article 23 of MiCA, CASPs must not circulate and provide non-euro currencies as a means of exchange once or if that currency has surpassed one million transactions or holds a value of more than €200m per day. 

Therefore, EURT did not meet these requirements as the European Unions’ laws over in MiCA are there to protect the Euro’s valuation and quell any fears any digital currency or fiat-backed stablecoin threatens to topple its usage. 

Eleanor Gaywood, Head of Strategy at crypto security firm Coincover, welcomes MiCA’s rules regarding stablecoins and crypto overall as a way to rid the sector of its “Wild West” image. 

She said: “Crypto has been crying out for more regulatory oversight for years. The quicker we can bring in proportionate and targeted regulation, the quicker crypto can brush off its ‘Wild West’ image. 

“Having stricter disclosure requirements, regular audits of crypto firms and more robust capital reserve requirements will help avoid crises like FTX, building trust and transparency in the market. 

“The implementation of MiCA’s provision for stablecoins puts the EU at the forefront of this transition and I would be surprised if other jurisdictions don’t soon follow suit.”

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Whereas Bitstamp has begun delisting stablecoins in a bid to become MiCA compliant, there are stablecoin issuers such as Circle that have successfully been granted an EU Electronic Money Institute (EMI) licence to provide its USDC stablecoin in the market. 

With Circle being the first and only stablecoin issuer in Europe to be compliant with the new regulations, this gives the company an early foothold in the increasingly competitive stablecoin market, with Tether and PayPal yet to register and comply with EU laws. 

What the issuers of USDC’s early arrival into a post-MiCA Europe signals is that stablecoin and crypto issuers stand a better chance of gaining more motion in the European market if they are to abide by the rules and regulations. 

However, Gaywood believes that with more exchanges and companies like Bitstamp delisting certain cryptocurrencies,  there is confusion in MiCA’s infancy phase.  Consequently, widespread industry collaboration is vital for Europe’s new crypto regulations to become a success. 

She said: “While we can all agree that these provisions are good in theory, the success of MiCA in reality depends on industry collaboration. 

“Over the past few weeks we’ve seen several exchanges de-list certain stablecoins in the run up to implementation deadline, which to me, suggests there is still an element of confusion amongst crypto firms over how to comply with the new rules. 

“Looking ahead, I hope that ESMA works collaboratively with the industry in helping firms comply rather than regulating through enforcement action such as fines or penalties.”

It remains to be seen what the likes of Binance, Crypto.com and Coinbase will do when it pertains to MiCA’s rules, being three of the largest crypto exchanges in the world and may have to delist certain digital currencies in order to enter the market. 

Nonetheless, MiCA’s introduction is one of the most pivotal regulatory landmarks in crypto’s relatively short history and may serve as a benchmark for other countries to follow suit, such as the UK and the US.