Patrick

MiCA, the regulatory framework by the European Union (EU), is boosting the utilization and adoption of EUR-backed stablecoins, challenging the dominance traditionally held by USD-backed coins. Notably, the regulatory initiative, <a href="https://coingape.com/stablecoin-regulation-eu-drafts-complaints-rules-under-mica/" target="_blank" rel="noopener noreferrer nofollow">MiCA</a>, covers various aspects of crypto-assets, including transparency, authorization, and supervision of transactions.
In addition, it also aims to strengthen market integrity and financial stability while safeguarding consumer interests.
<h2 id="mica-to-boost-eur-backed-stablecoin">MiCA To Boost EUR-Backed Stablecoin</h2>
According to Patrick Hensen, Director of Strategy and Policy at <a href="https://coingape.com/circle-launches-web3-services-on-solana-with-focus-on-developers/" target="_blank" rel="noopener noreferrer nofollow">Circle</a>, the issuer behind USDC stablecoin, Markets in Crypto-Assets (MiCA) has already shown promising effects on EUR-stablecoins. In a recent X post, Hensen highlighted that EUR-stablecoins are used in about 1.1% of the total euro-denominated crypto transactions now.
Although the number seems negligible as compared to the 90% used by the USD-backed coins, the Circle director emphasized that the 1.1% is “actually an all-time high”. Besides, he noted that there used to be no transactions using the EUR-stablecoins even before a few years, noting the rising momentum of the <a href="https://coingape.com/glossary/stable-coins/" target="_blank" rel="noopener noreferrer nofollow">stablecoins</a> in the EU.
On the other hand, Patrick Hensen further emphasized the potential for further growth in EUR-stablecoin liquidity and transaction volumes with MiCA’s full implementation. Considering the potential positive impact of MiCA on the EU’s stablecoin sector, several experts anticipate it to be a tough competitor to the USD-stablecoins.
<figure style="width: 100%" class="wp-caption aligncenter"><img decoding="async" src="https://pbs.twimg.com/media/GP8TYyiXYAAY6IK?format=jpg&amp;name=large" alt="EUR-Stablecoin Vs USD-Stablecoin Utilization" width="750" height="441">
 <figcaption class="wp-caption-text">
 Source: Patrick Hensen, X
 </figcaption>
</figure>
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<h2 id="potential-impact-criticism-amid-stablecoin-debate">Potential Impact &amp; Criticism Amid Stablecoin Debate</h2>
As the EU gears up for the implementation of the <a href="https://coingape.com/mica-regulation-how-eu-regulatory-regime-impact-stablecoin/" target="_blank" rel="noopener noreferrer nofollow">MiCA regulations</a>, with a key deadline on June 30, notable changes are anticipated in the crypto market in the EU. As said earlier, this regulatory framework could further boost the EUR-backed stablecoins adoption, while placing it as a viable alternative to the USD-stablecoins.
It’s worth noting that the regulation aims to streamline operations within the crypto landscape. Besides, it also focuses on enhancing investors’ confidence while offering transparent <a href="https://coingape.com/glossary/crypto-regulation/" target="_blank" rel="noopener noreferrer nofollow">crypto regulation</a> to ensure users’ safety.
However, the EU’s regulatory framework has also attracted criticism from market experts recently. For context, Tether CEO <a href="https://coingape.com/mica-regulations-tether-ceo-criticizes-bank-deposit-requirement-for-stablecoins/" target="_blank" rel="noopener noreferrer nofollow">Paolo Ardoino</a> took aim at the upcoming MiCA regulation arguing that the requirement of 60% of reserves in bank deposits could impact the stablecoin sector. Notably, several crypto exchanges like <a href="https://coingape.com/binance-conducts-first-in-person-law-enforcement-training/" target="_blank" rel="noopener noreferrer nofollow">Binance</a> are also shifting their operations in Europe due to the upcoming MiCA regulatory impact.
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The post <a href="https://coingape.com/mica-boosts-eur-stablecoin-utilization-will-cast-shadow-usd-backed-coins/" rel="noopener noreferrer nofollow">MiCA Boosts EUR-Stablecoin Utilization, Will It Cast A Shadow On USD-Backed Coins?</a> appeared first on <a href="https://coingape.com" rel="noopener noreferrer nofollow">CoinGape</a>.

MiCA Boosts EUR-Stablecoin Utilization, Will It Cast A Shadow On USD-Backed Coins?

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