Circle, a cryptocurrency company, has received sanctions from the MiCA to issue stablecoins in the European Union.
Despite the recent expansion of Circle [USDC], it has yet to surpass Tether [USDT] in terms of market capitalization. On the other hand, the stablecoin may be able to ascend to the summit due to recent developments regarding USDC.
In a significant victory for regulatory clarity in the digital asset sector, Circle received the initial regulatory sanction for its stablecoins under the European Union’s Markets in Crypto-Assets (MiCA) framework on July 1st.
Circle’s USDC and EURC stablecoins are now demonstrably compliant with the new regulations, which is a source of solace for investors who possess them, according to Jeremy Allaire, Circle’s co-founder and CEO.
This eliminates the concerns that investors would be compelled to redeem their holdings or transfer them to other assets in order to remain compliant.
Circle also declared that France would serve as its European headquarters. Circle’s robust partnership with the French Prudential Supervision and Resolution Authority (ACPR) and France’s progressive regulatory framework for digital assets influenced this decision.
Allaire also emphasized the historical importance of MiCA, the first comprehensive regulatory framework for digital assets in the EU.
He stated that this was a significant advancement for the legitimacy and stability of stablecoins, and a testament to the maturing digital asset industry in general.
At the time of publication, Circle’s USDC stablecoin had a $32 billion market capitalization and a 20% market share.
Nevertheless, Tether continues to be the undisputed champion in the stablecoin market, with a market capitalization of $112 billion and a remarkable 70% market share.
Circle’s regulatory sanction in Europe has the potential to be a pivotal moment, as it could increase demand for USDC and assist Circle in closing the distance with Tether.
Circle has been progressively losing market share to Tether, and this advantage has arrived at a critical juncture.
Circle can establish USDC as a secure and dependable refuge for European investors, particularly those who may have been hesitant to invest in the unregulated cryptocurrency market, by being the first to implement regulatory compliance.
This could result in a substantial increase in demand for USDC, not only in Europe but also on a global scale.
AMBCrypto’s analysis of Santiment’s data revealed that the network growth for both tokens had decreased over the past few days, despite this positive development.
This suggested that the quantity of new addresses in both of these stablecoins had temporarily decreased.
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