Circle becomes first global stablecoin issuer to become compliant under new EU laws

Circle has received a license to operate in the European Union under the Markets in Crypto-Assets (MiCA) regulation.

This act, which partially went into effect on Monday, is designed to provide a comprehensive legal framework for the crypto industry, enhancing investor protection, promoting innovation, and ensuring financial stability across the EU.

The global stablecoin issuer is the first to fully comply with the new set of regulations, which are based on stablecoins. 

According to Circle, it was able to become compliant under its Electronic Money Institution License, which it obtained from the French banking authority. 

Under the license, Circle can issue USDC and EURC in the EU. Additionally, Circle can offer Circle Mint, which allows users to directly access Circle’s stablecoins. 

“Since our founding, Circle has sought to build durable, compliant, and well-regulated infrastructure for stablecoins, and our adherence to MiCA, which represents one of the most comprehensive crypto regulatory regimes in the world, is a huge milestone in bringing digital currency into mainstream scale and acceptance,” said Circle CEO Jeremy Allaire.

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The new rules have posed some challenges to stablecoin issuers, which have to now seek compliance with regulators. Last month, Binance said that it would start cracking down on “unauthorized” stablecoins as the new set of rules took effect. 

Tether CEO Paolo Ardoino’s previously spoken out about his concerns regarding the new regulations. 

“These requirements could not only render the job of a stablecoin issuer extremely complex but also make EU-licensed stablecoins extremely vulnerable and riskier to operate. As with any regulatory framework of this scale, further discussions on the technical implementation standards are crucial to providing clarity to the market over certain provisions,” Ardoino told The Block.

Tether did not immediately return a request for comment on the Circle announcement. 

Following the Circle announcement, Binance CEO Richard Teng said that Circle’s compliance “marks a positive step forward.”

“Achieving MiCA compliance through our French EMI license is a significant step forward, not just for Circle, but for the entire digital financial ecosystem in Europe and beyond,” said Dante Disparte, chief strategy officer at Circle.

Updated July 1, 2024 at 12:49 pm ET: Modified headline to clarify that Circle is the first global stablecoin issuer to become compliant.

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