As of December 30, the European Union will fully implement the Market in Cryptoassets Regulation (MiCA), leaving one of the most widely used stablecoins globally out of the game: USDT.
This change opens the door to USDC and EURC, issued by Circle, consolidating a new balance in the European cryptocurrency market.
With a market capitalization of nearly $163 billion, USDT, the world's largest stablecoin issued by Tether, has been a benchmark in crypto trading.
However, compliance with the strict provisions of the MiCA Act has proven impossible for the issuance of this token. The regulation requires that all stablecoins listed on centralized exchanges be issued by entities that hold electronic money licenses and that they hold at least two-thirds of their reserves in an independent bank.
As a result, exchanges such as Binance and OKX have already delisted USDT, while other operators that have not done so have until December 30 to comply with the regulations.
This move has also led Tether to suspend support for its euro-pegged stablecoin, EURT, on November 27, marking a clear setback in its influence within the European market.
Circle and the rise of USDC and EURC
Circle, the issuer of USDC and EURC, has gained significant ground. The company was the first foreign stablecoin issuer to obtain the required license from the European Union in July this year. This has allowed USDC and EURC to not only remain on the market but also capture a considerable portion of the trading volume. Stablecoins pegged to the euro have registered volumes exceeding $42 billion throughout 2024 , a significant increase compared to 2023.
EURC, in particular, has been a major beneficiary, consolidating 91% of the market share alongside others such as Societe Generale's EURCV and Banking Circle's EURI.
Binance and its alliance with Circle
The role of Binance, the world's largest cryptocurrency exchange, has been key in the consolidation of USDC and EURC in Europe. In a joint strategy with Circle, Binance has promoted the adoption of these stablecoins as trustworthy and regulated alternatives. The collaboration also reflects the exchange’s efforts to align with global regulations and reinforce its commitment to transparency and compliance.
This approach not only seeks to boost investor confidence, but also seeks to strengthen the digital financial services ecosystem in the region.
The requirements of the MiCA Law
The MiCA Act establishes a detailed regulatory framework for stablecoins, focusing on ensuring the stability and security of the European market.
In addition to e-money licenses, stablecoin issuing companies must oversee all transactions intended for payments and ensure transparency in the disclosure of information about their reserves.
These measures seek to minimize the risks associated with cryptocurrencies and foster an environment of regulated innovation. The implementation of this framework in phases throughout the year has allowed currencies such as USDC and EURC to position themselves as leaders in an increasingly competitive market.
USDT ’s exit from the European market marks a milestone in the history of cryptocurrencies. While Tether faces challenges in adapting to regulations, Circle and other regulated issuers continue to establish themselves as key players in the development of the sector.
With a changing market and the support of a robust regulatory framework, the European Union is positioning itself as a global benchmark in the regulation of digital assets. This evolution could redefine the future of stablecoins, opening up new opportunities for issuers, investors and end users.
