EU Stablecoin Regulation Leaves USDT Out, USDC Still Available
Circle's USDC stablecoin is now the only major dollar-backed stablecoin available for trading in the European Union, following new regulations under MiCA. According to Circle, USDC is the only top-10 stablecoin by market cap that has been given approval under MiCA, while Tether's USDT was left out due to its reserve requirements.
Under MiCA, stablecoin issuers must segregate their reserves, issue regular attestations, comply with redemption rights of customers, and adhere to governance standards. This means that exchanges catering to EU customers can no longer offer stablecoins by issuers that fail to meet these requirements.
The stricter regulations are a reflection of the increasing regulatory concern about the growing position of stablecoins in finance. The European Systematic Risk Board has warned that the connection between stablecoin reserves and banks poses risks to financial stability.