Crypto Exchanges And Stablecoin Issuers Scramble To Meet New EBA Rules
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The European Banking Authority (EBA) has announced its plans to set up a framework to look into stablecoin issuers by the end of the month.
The plan aligns with MiCA’s overall regulatory policies, which provide a strict cap on transaction values and volumes.
Stablecoins do not have the authority to facilitate over 1 million transactions or an excess of €200 million for daily limits.
Operators Face Issues Due To Regulatory Caps
The EBA also plans to issue a comprehensive report to clarify how it will measure transaction volumes. Following initial consultations, transactions involving companies not operating in the EU may be included in the cap calculations.
The new regulation could change the landscape for major issuers like Circle and Tether. The new rules will set strict controls on using stablecoins for business transactions. This may go a long way to sideline significant players from the EU market.
Stablecoin issuers have raised concerns over the implications of the impending regulations. Circle, behind the USDC token, and Tether, behind the dollar-pegged USDT, may feel more operational heat than others.
EU regulators have sought the best ways to regulate stablecoins and cryptocurrencies. Several proposals have been dropped. With the latest regulation, the regulatory bodies are going in the right direction.
Introducing the new rules may also favor other firms, enabling entities licensed within an EU member state to operate in different countries. Article 23 of MiCA states that stablecoin issuers that exceed the defined transaction limits must cease operations. The rule protects the euro from losing its superiority and relevance among private digital currencies.
The MiCA New Regulation May Also Affect Crypto Exchanges
Most stablecoin issuers still need help with compliance and gaining the required operating license. Circle has been pursuing its license and working hard to officially register before the deadline. The platform is conditionally registered with France’s regulatory body to become a digital asset service provider.
The new rules may also affect cryptocurrency exchanges by the end of the month. Major crypto exchange Binance has already stopped issuing some of its services in the region.
Binance reportedly stopped offering copy trading services on June 26. The crypto exchange has always had battles with regulator bodies over the years.
