Circle, a well-known cryptocurrency company, made headlines on July 1 when it announced that it had secured an e-money license from France. This achievement is significant as Circle is now the first global stablecoin issuer to comply with the EU’s Markets in Crypto-Assets (MiCA) regulations.
The license, granted by France’s financial regulator, the Autorité de Contrôle Prudentiel et de Résolution (ACPR), authorizes Circle to issue its stablecoins USDC and Euro Coin (EURC) across the EU under the new regulatory framework. This move is effective immediately and marks a major step towards integrating digital currency into mainstream financial systems.
Stablecoins, such as those issued by Circle, are cryptocurrencies that are pegged to fiat currencies like the US dollar. They provide investors with stability by avoiding the volatility often associated with other cryptocurrencies like Bitcoin. Additionally, stablecoins allow for quick transitions in and out of crypto investments without the need to rely on traditional fiat currency in bank accounts.
The MiCA legislation is the EU’s first comprehensive legal framework that governs crypto operations. It includes specific provisions aimed at protecting investors and preventing market manipulation. While certain MiCA provisions related to crypto asset service providers will come into effect by the end of December 2024, companies have until July 2026 to ensure full compliance with these regulations.
Circle’s achievement of MiCA compliance allows it to expand its stablecoin services throughout the European Union. The “passporting” feature of MiCA enables crypto firms registered in one EU country to operate in other member states, enhancing market access for Circle and other compliant companies. Founded in 2018, Circle has gained recognition for its USDC stablecoin, which has become the second-largest stablecoin globally.
According to CryptoSlate data, there are currently $32.4 billion worth of USDC tokens in circulation, positioning it as a significant player in the stablecoin market. While Tether’s USDT remains the largest stablecoin with $112.7 billion in circulation, Circle’s recent regulatory milestone in France sets the stage for further growth and adoption of its stablecoin services across Europe.
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