PANews reported on January 10 that according to The Block, analysts at JPMorgan Chase said in a report on Wednesday that the EU's landmark "Markets in Crypto Assets (MiCA)" regulations, which will take effect on December 30, 2024, may increase the market share of stablecoins pegged to the euro. Currently, stablecoins pegged to the euro account for only 0.12% of the stablecoin market share, but MiCA can improve this situation by encouraging European banks and financial institutions to adopt euro stablecoins to meet customer needs and conduct blockchain-based financial settlements. Notable examples include Societe Generale's EURCV stablecoin and the stablecoin that BBVA plans to launch in cooperation with Visa.
Under MiCA, only compliant stablecoins can be used in regulated markets, forcing issuers like Tether to adapt or exit. For example, Tether's EURT stablecoin and USDT have been delisted by exchanges operating in the European Union. Despite these challenges, analysts say Tether remains dominant globally, driven by demand in less regulated regions such as Asia. They also note that Tether has made strategic investments in companies that comply with MiCA regulations.
Overall, despite the higher compliance costs introduced by MiCA, its long-term impact on the crypto market could be positive, attracting institutional investors and encouraging adoption of euro-pegged stablecoins, analysts said. As the EU takes strides in this regulatory area, they added, the U.S. is likely to follow suit and introduce its own cryptocurrency regulations under the incoming Trump administration.
