Crypto and Web3 firms have been asking for more regulatory clarity for years.
And now, with the news Sunday (June 30) that the European Union’s landmark Markets in Crypto-Assets Act (MiCA) new regulatory requirements for stablecoin issuers have gone live, observers are wondering if the digital asset sector’s “Wild West” days are making their way to the rearview.
After all, the digital asset and cryptocurrency industry shows no sign of fading as we near the 21st century’s second quarter. Having stricter disclosure requirements, regular audits of crypto firms and more robust capital reserve requirements will help build trust and transparency across the marketplace — and the EU’s implantation of MiCA’s provision for stablecoins puts the EU at the forefront of crypto regulation.
Already, stablecoin issuer Circle announced on Monday (July 1) that it had secured an Electronic Money Institution (EMI) license, becoming the first global stablecoin issuer to obtain the necessary license for issuing dollar- and euro-pegged stablecoin tokens within the EU’s boundaries under the MiCA framework.
“Achieving MiCA compliance through our French EMI license is a significant step forward, not just for Circle, but for the entire digital financial ecosystem in Europe and beyond,” Circle Chief Strategy Officer and Head of Global Policy Dante Disparte said in a statement. “As digital assets become increasingly integrated into the mainstream financial landscape, it is essential that we establish robust, transparent frameworks to promote trust and adoption … building a more inclusive, compliant future for internet finance.”
Of the top 10 stablecoins by market capitalization, only USDC is currently MiCA-compliant.
Read more: What EU MiCA’s July Implementation Means for Global Regulation
“Today’s announcement from Circle is a major milestone in the ongoing development of the internet financial system, with one of the largest economies in the world having established clear regulations that make stablecoins legal electronic money, and ushering in a phase in the crypto market’s development as a mainstream infrastructure for payments, finance and commerce,” Circle Co-founder and CEO Jeremy Allaire said in a Monday post on X (formerly Twitter), noting that MiCA marks “the start of the mainstream growth and adoption phase” of digital asset.
The notion of witnessing major global laws enshrining stablecoins into the financial system of the third-largest economy in the world is something that would have been inconceivable just a short 10 years ago.
What it also means is that there will be no more shortcuts and regulatory corner-cutting for crypto and Web3 firms — at least not in Europe.
As Amias Gerety, partner at QED Investors, told PYMNTS last June, “the crypto community believed and had a real conviction what they were doing was so new that existing laws could not possibly apply. And in the history of financial services, there’s basically never been a group of people with any commercial success who had that conviction … once you have that conviction, then you start searching for excuses not to comply.”
But gone now, as of Sunday’s MiCA implementation, is the era during which the crypto sector chose to base itself out of regulatory havens while seeking open access to global marketplaces.
“Looking ahead, I hope that ESMA [the European Securities and Markets Authority] works collaboratively with the industry in helping firms comply rather than regulating through enforcement action such as fines or penalties,” Eleanor Gaywood, head of strategy at Coincover, told PYMNTS.
Read more: What CFOs Should Know About the Growing Use of Stablecoins
The EU wasn’t the only major global economy that debuted a crypto-focused framework recently.
On Friday (June 28), the U.S. Department of the Treasury and the Internal Revenue Service (IRS) released new regulations around tax reporting requirements for the sale and exchange of digital assets. The regulations are meant to help taxpayers file accurate returns and pay taxes already owed under current law.
Decentralized platforms that do not hold assets themselves will be exempt from the IRS regulations, while other, custodial crypto platforms will need to report transactions to the IRS starting in 2026.
“These final regulations will implement Congress’s bipartisan directive to ensure that owners of digital assets receive the information they need from brokers to file their taxes more accurately, more easily, and less expensively, and that the IRS has the information needed to address the tax evasion risks posed by digital assets,” wrote an IRS spokesperson in a statement provided to PYMNTS.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More