Starting from next June 30th, the MiCA regulation will come into force for all exchanges registered with the European Union: the details.
The digital asset industry is gearing up for a major shift with the European Union’s (EU) Markets in Crypto-Assets Regulation (MiCA) set to take effect on June 30. The rules imposed by MiCA could prevent European users from accessing certain stablecoins.
In particular, the new regulation includes some rules that would penalize stablecoin issuing companies, especially the larger ones. Among these, a heavily debated rule for companies issuing stablecoins is the requirement for large stablecoins to hold at least 60% of their monetary liquidity with banking institutions.
Several stablecoins, including Tether, have not yet clarified whether they will comply with MiCA’s new rules. Paolo Ardoino, CEO of Tether, has criticized the EU regulations, describing them as overly restrictive and arguing that they will end up stifling innovation.
For a stablecoin like Tether, for example, meeting MiCA’s standards is not straightforward given the enormous liquidity managed by the company. Its reserves consist primarily of a combination of corporate bonds and short-term U.S. debt securities rather than bank deposits. Additionally, bank deposits are insured up to €100,000 by the European Union’s European Deposit Insurance System.
Ahead of MiCA’s implementation, some exchanges, including OKX and Binance, have preemptively decided to gradually remove Tether from their platforms.
