In the cryptocurrency world, anticipation and anxiety loom as the European Union’s Crypto Asset Markets (MiCA) regulation moves closer to implementation. With just a few months left until the groundbreaking rules go into effect, the altcoin community is grappling with uncertainty and potential consequences, especially when it comes to stablecoins. Here are the details…
Stablecoin statement from Binance official
Binance France Legal Manager Marina Parthuisot issued a stern warning during an online public hearing organized by the European Banking Authority (EBA). Parthuisot warned that the MiCA regulation, which will become active in June 2024, could lead to massive delistings of stablecoins across Europe, which could send shockwaves through the crypto market in the region and beyond.
The MiCA regulation, completed in June last year, is set to position the European Union as the first major jurisdiction worldwide to introduce comprehensive crypto regulations. Its key provisions include the ability for cryptocurrency exchanges and wallet providers to operate seamlessly across the EU under a single licence.
MiCA causes concern for stablecoins
However, MiCA’s impact on stablecoins, a type of cryptocurrency whose value is pegged to other assets such as fiat money or gold, has raised significant concerns. Parthuisot’s warning is based on the lack of approved projects and a June 30 deadline that could trigger a mass delisting. Changpeng “CZ” Zhao, CEO of Binance, praised the clarity MiCA brings to the regulatory environment. However, Binance and other exchanges faced regulatory pressures that led them to withdraw from several European jurisdictions, including the Netherlands, Cyprus and Germany.
The difficulties do not end there. MiCA introduces provisions requiring stablecoin issuers to be EU-based enterprises. This requirement creates challenges for many blockchain organizations that opt for innovative governance models that may not meet the EU’s definition. Thomas Vogel, a partner at law firm Latham & Watkins, expressed concern, saying, “Many stablecoin issuers will be completely decentralized or claim to be so, so there will be no point of decision or issuance.” This lack of clarity raises critical questions about whether these issuers can meet MiCA’s stringent criteria.
CZ made a statement
Changpeng Zhao said that the statement about this situation was “taken out of context”. In fact, he pointed out that they have several partners that have launched EUR and other stablecoins in a fully compatible manner.
4.
It was a question taken out of context.
In fact, we have a couple of partners launching EUR and other stable coins, in fully compliant manners of course.
— CZ 🔶 Binance (@cz_binance) September 21, 2023