Circle Secures Initial Stablecoin License Under EU’s New MiCA Regulations

Circle recently obtained an Electronic Money Institution (EMI) license, marking it as the first international stablecoin provider authorized to offer crypto tokens tied to the dollar and euro within the European Union (EU). This development aligns with the EU’s Markets in Crypto Assets (MiCA) regulations, allowing Circle to extend its operations across the EU’s extensive market.

This licensing achievement positions Circle advantageously in the EU, where it can potentially expand its user base among the 450 million residents of the 27-member trading bloc. The EMI license is particularly strategic as Circle’s USDC stablecoin, valued at $32 billion and currently the second largest globally, seeks to close the gap with the market leader Tether’s USDT, which boasts a $110 billion valuation.

Circle’s operations will be consolidated under Circle Mint France following the French banking authority’s approval. This will facilitate the local issuance of its EURC stablecoin, denominated in euros, and the continued issuance of USDC, ensuring compliance with the newly implemented MiCA regulations. This move comes at a critical time, as prior to MiCA’s enactment on June 30, several crypto platforms had started to delist euro-backed stablecoins, including Tether’s EURT.

MiCA regulations emerged in response to potential disruptions posed by major technology firms like Meta’s Diem initiative (formerly known as Libra) entering the financial sector. This led to five years of rigorous policy development in Europe, according to Circle’s head of policy, Dante Disparte. Disparte, who previously worked on the Libra project, expressed a deep connection with MiCA’s evolution, highlighting its significance in validating the cryptocurrency industry’s longevity and the strict compliance environment within the EU’s robust economy. Disparte emphasized the end of an era where companies could operate within regulatory grey areas, underscoring the EU’s commitment to stringent oversight and consumer protection.

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