New EU regulations require stablecoin issuers to be authorized starting in 2025, prompting crypto platforms to develop their own stable solutions.
MiCA Regulation and Its Impact on the Market
Effective from 2025, the EU's Markets in Crypto-Assets regulation (MiCA) mandates all stablecoin issuers to obtain proper authorization in the EU. This aims to enhance transparency, liquidity, and consumer protection in the crypto market.
The Role of Stablecoins in the Crypto Market
Stablecoins are digital assets intended to maintain a steady value, typically backed by traditional currencies like the U.S. dollar or euro. They are commonly used to convert cryptocurrencies into fiat money as they remain stable and are not subject to extreme price swings.
Crypto Platforms' Response
In response to the EU's new regulations, crypto platforms like Kraken and Crypto.com are developing their own stablecoins. This avoids potential dependency on third-party stablecoin issuers that may not comply with EU rules. Kraken is working on a dollar-backed stablecoin through its subsidiary in Ireland. Crypto.com plans to launch its stablecoin in the third quarter of 2025, though details about the fiat currency it will be backed by remain unclear.
The new EU regulations bring significant changes to the crypto market, pushing major platforms to develop their own solutions to stay compliant.
