Reported by Coin World:
Authored by Aiying
Circle announced that its stablecoins, USDC and EURC, are compliant with the new stablecoin regulations introduced by the European Union, becoming the first global stablecoin issuer to operate in compliance with the MiCA regulations. Starting from July 1st, Circle officially began issuing these two stablecoins to European customers.
This marks a significant milestone in the development of the internet financial system, indicating that one of the world’s largest economies has established clear regulations to make stablecoins legal tender, ushering in a new phase for the cryptocurrency market to integrate into mainstream payment, financial, and commercial infrastructure.
Prior to this, in a detailed analysis in a report titled “A Comprehensive Interpretation of the European MiCA Bill: Far-reaching Impacts on the Web3 Industry, DeFi, Stablecoins, and ICO Projects,” Aiying provided profound insights into the effects the bill would have on the industry, particularly the stablecoin market. MiCA mandates that stablecoins backed by fiat currency must have sufficient liquidity reserves and obtain an Electronic Money Institution (EMI) license. Additionally, it sets limits on stablecoin trading volume and other asset support requirements. June 30th marked a crucial juncture, demanding exchanges to delist stablecoins that did not meet the stipulated requirements.
Circle’s USDC is expected to capture market share from its larger competitor, Tether Holdings Ltd.’s USDT. Exchanges like OKX, Binance, Bitstamp, and Kraken have taken measures to limit support for USDT trading within the EU, prohibiting the purchase or sale of other cryptocurrencies using this stablecoin.
Circle’s current opportunity bears historical similarities to the rise of USDT.
In a recent article by Aiying titled “In-depth Analysis of Stablecoin Racing: Models, Operational Principles, Trends, and Thoughts on Hong Kong Stablecoins,” it was mentioned that USDT’s greatest advantage lies in its first-mover status, with its rise largely attributed to exchange support and market trends. As the cryptocurrency market surged, USDT experienced substantial issuance, leading to market criticisms of manipulating Bitcoin prices.
However, in hindsight, this causal relationship is perhaps inverted, with the overlooked factors being China’s closure of virtual currency exchanges and USDT’s simultaneous listing on the top three exchanges that year.
Similarly, according to Chainalysis’ “2023 Cryptocurrency Geographic Report,” the region accounted for 17.6% of global trading volumes between July 2022
