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Circle Clears MiCA Hurdle to Become an Authorized Stablecoin Issuer in the EU – DL News
- Circle has been granted an electronic money institution license by French regulators.
- The news comes a day after EU rules on stablecoins came into force.
Cryptocurrency firm Circle is now registered as an electronic money institution, giving it a crucial license to issue stablecoins under European Union cryptocurrency law, which came into effect one day.
The EU approval signals a “move into the major phase of adoption of digital currency technology,” Circle CEO Jeremy Allaire said at a press conference in Paris on Monday.
Circle needs a license to issue stablecoins under the EU’s Markets in Cryptocurrencies (MiCA) regulation, which came into force on Sunday.
The company is best known for issuing the dollar-pegged USDC, the second largest stablecoin in the world, with a market capitalization of about $33 billion, behind Tether’s $113 billion USDT and the euro-pegged stablecoin EURC.
Circle said on Monday that its Circle Mint, registered in France, will allow users to mint USDC and EURC across the European market.
Circle first applied to French regulators to become a licensed electronic money institution in April 2023.
Since Circle is now licensed in France, it will no longer need to apply for a MiCA license when the next phase of regulation, targeting so-called cryptocurrency service providers, comes into force in December.
This is because MiCA allows companies registered in a particular location to “port” their services to the rest of the EU.
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Electronic money
MiCA defines e-money tokens as electronic money.
This could overlap with another European regulation, the Payment Services Directive, and cryptocurrency lawyers say it could impact companies that are not licensed under both laws.
The second iteration of this regulation, or PSD2, has been in place since 2016. It requires platforms that handle electronic money to comply with onerous rules that are much stricter than even those for cryptocurrency platforms.
Lawyers say it is still unclear whether stablecoins are considered electronic money. Few cryptocurrency firms have a PSD2 license.
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