Launched in 2018 by crypto company Circle, USDC is currently the world’s second-largest stablecoin, with more than $30 billion worth of tokens in circulation.
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Cryptocurrency firm Circle said on Monday it was now registered as an electronic money institution (EMI) in France, having received a key license to become a compliant stablecoin issuer under the European Union’s strict crypto laws.
Circle, mainly based on its dollar coinsUSDC (stablecoin) said in a statement that it has been granted an electronic currency license by the French banking regulator Autorite de Controle Prudentiel et de Resolution (ACPR).
The license makes Circle the first global stablecoin issuer to comply with the European Union’s landmark Markets in Crypto-Assets (MiCA) regulatory framework, the company said.
Circle added that the approval will mean that its USDC and Euro Coin (EURC) tokens are now issued in the EU, in compliance with MiCA’s stablecoin regulatory obligations. The company said it will also open its Circle Mint in France, allowing businesses to mint and exchange Circle stablecoins.
Circle co-founder and CEO Jeremy Allaire said in a statement on Monday: “Since its founding, Circle has been committed to building durable, compliant and well-regulated infrastructure for stablecoins.
Allaire added: “MiCA represents one of the most comprehensive cryptocurrency regulatory regimes in the world, and our compliance with MiCA is a huge milestone in bringing digital currencies into mainstream scale and acceptance.”
A stablecoin is a cryptocurrency pegged to a traditional asset, typically a government-issued currency such as the U.S. dollar. Investors hold them to avoid the volatility of other cryptocurrencies such as Bitcoin.
They are also a key way to get in and out of cryptocurrencies quickly and allow users to avoid relying on fiat currencies stored in bank accounts.
EU introduces stablecoin rules
EU regulators last year passed the world’s first comprehensive law regulating how cryptocurrency companies operate. The law outlines rules that dictate the way companies should establish investor protection and ensure their platforms are not vulnerable to manipulation.
The law, called the Market in Crypto-Assets (MiCA), will officially come into effect in May 2023.
However, the terms governing the stablecoin were not approved until last week. The measures are considered particularly strict because they impose limits on trading volumes for certain stablecoins, particularly those denominated in U.S. dollars.
Under the regulations, companies must stop issuing non-euro-denominated stablecoins used as a “means of exchange” if they exceed 1 million transactions per day or are worth more than 200 million euros ($215.2 million).
As a French-registered EMI, Circle said it can now offer its services not only to French customers, but across the EU, including the ability to mint and redeem USDC through Circle Mint.
This is because, according to MiCA, cryptocurrency businesses are able to provide services in one EU country and “passport” them into other markets within the EU.
The remaining obligations under MiCA involving cryptoasset service providers will come into effect on December 30, 2024.
Launched by Circle and cryptocurrency exchange Coinbase in September 2018, USDC is currently the world’s second-largest stablecoin, with $32.4 billion worth of tokens in circulation, according to CoinGecko. It is second only to Tether’s USDT, which is the world’s largest stablecoin with $112.7 billion in circulation, according to CoinGecko.
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