Stablecoins are not securities in the EU πͺπΊ πΊπΈ. The EU has established clear regulations in its law on Markets in Crypto Assets (MiCA) which classify payment stablecoins as electronic money on open, public blockchains. #PaymentStablecoins #MiCA
https://twitter.com/europe4crypto/status/1624472031478657024
The EU's regulations on payment stablecoins simply stop the discussion of stablecoins being securities before it gets started. Payment stablecoins are explicitly defined as electronic money, providing clarity and certainty for both issuers and users. #NotASecurity
The EU's regulations on E-Money Tokens ensure that payment stablecoins are subject to similar rules as traditional electronic money, such as consumer protection and anti-money laundering measures. #ConsumerProtection #AML
The EU Commission wanted the EMT rules in MiCA to be identical to those applying to traditional electronic money. But some EU countries & Parliamentarians made some of the rules more conservative than those applicable to traditional e-money during the legislative negotiations
No law is perfect! so of course there are a number of challenges with the stablecoin provisions in MiCA. They will be addressed in secondary legislation. One of the main concerns is the issuance caps for non-euro stablecoins, which may stifle the use of stablecoins in the EU.
MiCAβs high own funds (capital buffer) requirements are also widely seen as disproportionate to the minimal market risk, operational risk, and non-existing credit risk of EMT issuers. MiCA requirements are higher than for fiat or traditional electronic money in the EU!
Tldr: In the EU, payment stablecoins are classified as electronic money, not securities. While no law is perfect, the EU's MiCA provide legal clarity for stablecoin issuers and a regulatory framework for safe and responsible use of stablecoins. #MiCA #LegalClarity
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