The European Union’s Markets in Crypto-Assets Regulation (MiCA) framework is gradually being implemented according to its planned timeline. The first set of rules, effective from July 1, focuses on stablecoins and their issuers.
These regulations have removed players who couldn’t meet the requirements and created a positive environment for stablecoins tied to local currencies.
New EURT Stablecoin on Stellar Blockchain
A new partnership between France-based fintech company Next Generation and Ireland-based electronic money institution (EMI) Decta aims to reintroduce a euro-pegged stablecoin, EURT, on the Stellar blockchain. This initiative, launched on Aug. 5, is fully compliant with MiCA.
Next Generation is linked to the renowned fintech player Tempo France, which initially launched EURT in 2017 in collaboration with the Stellar Foundation. However, due to a lack of regulatory framework at the time, the project was suspended.
European Union Regulatory Clarity Under MiCA
Under MiCA, stablecoins are classified as electronic money tokens (EMTs), aligning them with traditional e-money. Issuers must have an EMI license or be a credit institution. This clarity has made the euro-backed stablecoin market more predictable and attractive to investors.
An industry analyst told Cointelegraph that MiCA could lead to increased demand for euro-backed stablecoins in European markets.
Decta’s Role and Market Potential
Decta is authorized by the Central Bank of Ireland as an EMI, which allows it to issue EURT with full regulatory compliance. Suren Hayriyan, the president of Next Generation, stated that the current demand for euro-backed stablecoins is around $30 billion, with a supply of less than $300 million. This partnership aims to address this gap, with significant growth projections for EURT.
The euro-backed stablecoin market includes major players like Circle with its EURC stablecoin and Tether’s EURT. Hayriyan mentioned that despite these competitors, their strong regulatory compliance and technological infrastructure position them well in the evolving market. Next Generation and Decta plan to launch EURT by October.
Circle and European Union MiCA’s Compliance
Circle was the first global stablecoin issuer to comply with MiCA, choosing France as its European headquarters due to the country’s progressive stance on digital asset regulation.
The activation of MiCA is expected to boost the euro-backed stablecoin sector significantly. Market predictions estimate a minimum market capitalization of 15 billion euros by 2025, reaching 70 billion euros by 2026, and potentially surpassing 2 trillion euros by 2028.
