jakiro
Source: Aiying Payment Compliance
Circle announced that its USDC and EURC stablecoins have complied with the EU’s newly introduced stablecoin regulations, becoming the first global stablecoin issuer to be compliant under MiCA regulations.Starting from July 1, Circle officially issued these two stablecoins to European customers.
This is an important milestone in the development of the Internet financial system, meaning that one of the world’s largest economies has established clear regulations to make stablecoins legal electronic currencies, pushing the cryptocurrency market into a new stage in mainstream payments, finance and commercial infrastructure..
Before this, Aiying wrote an article “European MiCA Act 10,000-word research report: A comprehensive interpretation of the far-reaching impact on the Web3 industry, DeFi, stablecoins and ICO projects.It analyzes the impact the bill will have on the industry, especially the stablecoin market.MiCA requires that stablecoins supported by fiat currency must have sufficient liquidity reserves and obtain an “Electronic Currency License (EMI).”In addition, the trading volume limit and other asset-backed requirements for stablecoins are also stipulated.June 30 is an important node, requiring the exchange to remove stablecoins that do not meet the regulations.
Circle’s USDC is expected to seize market share from USDT, a subsidiary of larger competitor Tether Holdings Ltd..OKX, bianace, Bitstamp, and Kraken have taken measures to change their EU transaction support for USDT recently this year, eliminating the ability to use the stablecoin to buy or sell other crypto assets.
Circle’s opportunity this time is historic similar to the rise of USDT
Aiying’s article yesterday[10,000-word long article research report] Stablecoin track: mode, operating principle, trend and thinking about Hong Kong stablecoin》 mentioned that the biggest advantage of USDT is its first-mover advantage, but its rise is mainly due to the support of the exchange and the market explosion.In the wilderness of cryptocurrencies, from the early Bitcoin blockchain to the later Ethereum ecosystem, USDT is a well-deserved pioneer, and at the same time guessed that the market exploded. If you look back at its coin address and market value, although it was 2014It was established in 2017, but its real rise was in 2017. In addition to the bull market, USDT began a super additional issuance, which was criticized by the market for manipulating the price of Bitcoin.
But in hindsight, this is a causal inversion. What is easy to be ignored is that one was that China closed its virtual currency transactions, and more importantly, that USDT was simultaneously launched on the top three exchanges that year.
Also, according to Chainalysis’s Crypto Geographic Report 2023, the region accounts for 17.6% of global transaction volume between July 2022 and June 2023. This share has been helped by the Mica Act.Cricle cleaned the house and let him gallop here.
And Cricle is almost certain to benefit from the growth and adoption of the euro digital currency (i.e., the euro stablecoin).The MICA Act sets clear rules for the issuance and operation of euro digital currencies, and both banks and electronic currency institutions are able to use euro stablecoins as a core part of their products and services.This means that the regulatory finance sector across Europe can now adopt this network, significantly expanding the application of stablecoins in business and finance.This market is very huge in terms of Aiying.
Cricle’s global compliance vision and starting point have made the present
All old people in the currency circle know that USDC rose in the USDT crisis, and its transparent, regulated and more liquid asset reserves have won the favor of customers.If we look back at the rise of USDC, the sharp increase in its coin-holding address usually corresponds to the decline in USDT’s coin-holding, which is usually the time when USDT’s risk event occurs, especially since it was the only stablecoin trading pair of compliant exchanges coinbase.This kind of regulatory support has brought great benefits to the early USDC market expansion, and is also the main competitiveness that impacts USDT’s first throne.Due to compliance, the Defi protocol prefers USDC, and liquidity mining has enabled USDC to quickly increase volume and has a better advantage on the chain.After Maker introduced the regulated stablecoin USDC in 2020, USDC has become the first choice for major Defi protocols. Currently, MakerDAO, Compound and Aave are the main supporters of USDC. Beyond the benefits of supervision,More importantly, as collateral for the Defi agreement, USDC has lower volatility compared to USDT.The starting point advantage of USDC can be summarized as compliance advantages.
What has Cricle done at the global compliance level?
Circle Registration is a monetary service business organization under the U.S. Treasury Department’s financial crime execution network. It is also carried out in accordance with the state’s laws on currency transmission business. It is generally considered as a prepayment method by regulation.Compared to USDT, USDC’s reserve assets are independent, assuming that Circle goes bankrupt, these reserve assets will be protected under the New York Banking Act and the Federal Banking Act.
Circle is the first crypto company to obtain an electronic currency transmission license in the United States, and the first to obtain a BitLicense in New York, and has obtained an electronic currency issuance license in the United Kingdom.
Two years ago, the EU reached the MiCA system and was eventually approved by the European Parliament, becoming the world’s most comprehensive stablecoin and digital asset market regulations.Circle then announced the launch of the euro stablecoin and made every effort to make it compliant with new EU regulations.France has been at the forefront of establishing crypto and digital asset regulation, and Circle chose France as its European headquarters, proving that the decision was wise.The company works closely with the French financial regulator ACPR to make its business compliant with MiCA regulations.
Circle has now obtained ACPR’s electronic currency issuance license and has become a MiCA-compliant USDC and EURC stablecoin issuer.European customers can now directly obtain USDC and EURC through Circle Mint France.
As a result, USDC successfully became the only major stablecoin in the world that complies with the new European stablecoin regulatory system.Circle has worked closely with regulators in France, the EU and the US to achieve full replaceability of global stablecoins on the blockchain network, maintaining technological innovation and complying with strict regulatory standards.
Currently, all USDCs and EURCs circulating in Europe comply with MiCA regulations. All EURC reserves held by Circle are managed under the supervision of French regulators, while USDC reserves held by Europe are in the EU by global systemic importance banks.manage.USDC held by European users is still completely replaceable worldwide, and can be traded, transferred, self-hosted, used for DeFi, etc. without any changes.
In addition, we know that USDC does not directly redeem with individuals.USDT for more than US$100,000, you can directly redeem Tether as long as you pay the registration fee, but Circle runs according to the customer level.Only its partners or Class A users (exchanges, financial institutions) are eligible to exchange with Circle.Individual ordinary users (Category B) need to be expanded through third-party channels (such as coinbase).Starting from now on, Circle will issue and redeem USDC and EURC directly with major institutions through Circle Mint France in the European market, including exchanges, market makers, brokers, consumer wallets, fintech companies, payment institutions, banks and large-scaleenterprise.This market sales system greatly reduces the risk of users’ money laundering and effectively manages and isolates risks through the B-end.
Summarize
The launch of the MICA Act indicates a major shift in the market structure, and it is expected that within the next year, major global jurisdictions (including Japan, the United States, the United Kingdom, Singapore, Hong Kong, the United Arab Emirates, Brazil, etc.) will introduce comprehensive stablecoin rules, all of which areStrict regulatory compliance is required.The grayscale market space in the barbaric era is also constantly compressed, and ultimately it is greatly integrated with the compliance regulatory market. We are all witnesses of the changes in this financial era.
