Key Takeaways
- The EU is set to revise the MiCA framework to allow excluded foreign stablecoins like Tether to operate.
- This regulatory review is heavily influenced by the U.S. GENIUS Act and Trump’s pro-stablecoin policies.
- Diplomats will also consider expanding the framework to regulate emerging tokenized payments and deposits.
EU Set To Review MiCA’s Provisions for Stablecoins
The European Union (EU) has reportedly already decided to review the current regulatory framework governing crypto and stablecoin licensing and operation in the Eurozone, even as its Directorate-General for Financial Stability, Financial Services and Capital Markets Union is consulting whether it should be reviewed or left as is.
European diplomats have revealed that the EU is set to modify the Markets in Crypto Assets (MiCA) Framework, which regulates crypto across the region, to address the issue of non-EU stablecoin issuers that have been excluded from licensing due to the requirements established.
The review would also be influenced by the passage of the GENIUS Act in the U.S. and the push that the Trump Administration has given stablecoins.
The current framework left the largest foreign stablecoin issuers, including Tether, out of its consideration, a situation that lawmakers would consider addressing. Senior Director of EU Strategy & Policy at Circle, Patrick Hansen, raised the alarm about the effects of this on European crypto users, stressing that MiCA’s current implementation left them “either unprotected or cut off,” and that this omission encompassed “a significant gap.”
In addition, the new framework would also address the rise of emerging technologies such as tokenization, as diplomats would examine whether MiCA should be expanded to include new tokenized means of payment and deposits.
“Reopening the file seems unavoidable at this stage, not only in light of the position expressed by several European institutions (not least the ECB), but also to cater for the most recent regulatory and technological developments worldwide,” an unidentified diplomat told Euronews.
While MiCA’s transitional period for crypto asset service providers (CASPs) just ended on July 1, the framework was approved by the Council of the EU on May 16, 2023, meaning many of its provisions are based on realities dating from more than 3 years ago, a large period for an innovation-based industry like crypto.
