Launched in 2018 by crypto firm Circle, USDC is now the second largest stablecoin in the world with more than $30 billion worth of tokens in circulation.
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Cryptocurrency company Circle said on Monday that it is now registered as an electronic money institution, or EMI, in France, granting the firm a key license to become a stablecoin issuer under the European Union’s strict cryptocurrency laws.
Circle, which is best known for its USD or USDC stablecoins, said in a statement that it has been granted an electronic money license by France’s banking industry regulator, the Autorite de Controle Prudentiel et de Resolution, or ACPR.
The license makes Circle the first global stablecoin issuer to achieve compliance with the European Union’s landmark Markets in Crypto-Assets, or MiCA, regulatory framework, the company said.
Circle added that the approval will mean that both its USDC and Euro Coin tokens, or EURC, are now issued in the EU in compliance with MiCA’s stablecoin regulatory obligations. The company said it is also opening its Circle Mint, which allows businesses to mint and disburse Circle stablecoins, in France.
“Since its inception, Circle has strived to build a durable, compliant and well-regulated infrastructure for stablecoins,” Circle co-founder and CEO Jeremy Allaire said in a statement Monday.
“Our compliance with MiCA, which represents one of the most comprehensive crypto regulatory regimes in the world, is a huge milestone in bringing digital currency to mainstream scale and adoption,” Allaire added.
Stablecoins are a type of cryptocurrency pegged to traditional assets, typically government-issued currencies such as the US dollar. Investors hold them to avoid the volatility of other cryptocurrencies such as Bitcoin.
They are also a key way to quickly trade in and out of cryptocurrencies, allowing users to avoid relying on fiat currencies stored in bank accounts.
Last year, EU regulators approved the world’s first comprehensive law governing how cryptocurrency companies should operate. The law outlines rules specifying ways companies should implement investor protections and ensure their platforms are not vulnerable to manipulation.
The law, known as MiCA, officially came into force in May 2023.
However, the stablecoin provisions were only approved last week. These measures were considered particularly strict because they placed limits on how much certain stablecoins could be traded, especially those denominated in the US.
Under the rules, companies must stop issuing non-euro-denominated stablecoins used as a “medium of exchange” if they exceed a threshold of more than 1 million transactions or a value of more than 200 million euros ($215.2 million) per day. to Article 23 MiCA.
As an EMI registered in France, Circle said it is now able to offer its services – including the ability to mint and redeem USDC through Circle Mint – to customers not only in France, but throughout the European Union.
This is because, according to MiCA, crypto businesses can offer their services in one EU country and “fit” them to other markets within the bloc.
The remaining obligations set out under MiCA that apply to cryptoasset service providers will come into effect by December 30, 2024. After that, cryptocompanies will have until July 2026 to fully comply with MiCA.
Launched in September 2018 by Circle and crypto exchange Coinbase, USDC is now the second largest stablecoin in the world, with $32.4 billion worth of tokens in circulation, according to data from CoinGecko. According to CoinGecko, it is second only to Tether’s USDT, the world’s largest stablecoin with $112.7 billion in circulation.