The new EU digital asset regulations (MiCA) are anticipated to result in Circle USDC stablecoin gaining market share from Tether’s USDT.
According to Bloomberg, the impending European guidelines on digital assets, which are scheduled to be implemented in July, have the potential to considerably benefit Circle USDC stablecoin. This information was provided by crypto analytics firm Kaiko Research.
Anastasia Melachrinos, an analyst at Kaiko, emphasized that USDC has the potential to increase its market share in comparison to its larger competitor, USDT, due to the fact that traders utilize stablecoins to transfer digital assets between exchanges or to hold wealth in the face of volatile token prices.
The regulatory transition is already having an impact on prominent crypto exchanges. OKX has reduced the trading support for USDT in the European Union. However, users can continue to deposit, withdraw, conduct over-the-counter transactions, and exchange USDT for euros. Kraken is also in the process of evaluating potential strategies for delisting USDT in accordance with the new EU regulations, known as MiCA (Markets in Crypto-Assets).
During a conference call, Melachrinos stated, “It is inevitable that Kraken and OKX will delist all of the EURO/USDT pairs.”
The European Banking Authority will supervise the regulations regarding stablecoins, and MiCA will be completely operational by early 2025. Issuers of asset-referenced and e-money tokens will be required to obtain a license from a national financial authority by June 30 and adhere to rigorous regulations regarding corporate governance, conflicts of interest, and reserve management. This includes the preservation of a third of all funds at an independent credit institution.
In the interim, Circle USDC stablecoin is subject to regulatory scrutiny from the U.S. Securities and Exchange Commission (SEC) as it pursues a multi-billion dollar initial public offering (IPO).
The SEC has previously impeded Circle’s efforts to go public through a special-purpose acquisition company (SPAC) in 2021 by expressing concerns regarding the classification of USDC as a security. Despite the fact that Circle has resolved the majority of the SEC’s concerns, it is still navigating the regulatory landscape as it pursues approval for its IPO.
