From Nasdaq:

The Markets in Crypto Assets Regulation (MiCA) is a significant change in the regulation of the crypto market. The central concern is the misunderstanding about fiat backed stablecoins in Europe under MiCA. Jón Egilsson is a co-founder and the chairman of Monerium and has a background in central banking.

MiCA does not introduce new regulations for fiat backed stablecoins. It confirms that stablecoin issuers must be regulated as electronic money institutions (EMIs). Many stablecoins in Europe are currently illegal because they are not authorized and regulated as e-money under EU law established more than two decades ago.

Stablecoins representing a claim on the issuer already fall under the definition of e-money. Starting from July 2024, issuers must comply with additional requirements in MiCA. Only EMIs and credit institutions can legally issue fiat stablecoins in the European Economic Area trading bloc.

Issuers face legal consequences for not obtaining the proper license for offering e-money, including fines and potential criminal charges.

Regulatory compliance is crucial for protecting consumers from fraudulent practices, financial instability, money laundering, terrorism financing, and ensuring the reliability of digital fiat money in our system. Currently, only Monerium, Membrane and Quantoz Payments are issuing on-chain fiat stablecoins under the electronic money directive.

Certain stablecoin issuers are ignoring EU regulations by offering their products within Europe without the required authorization, showing disregard for European laws. The question remains if uncompliant stablecoin issuers will be held accountable and if there will be effective regulatory oversight and enforcement in the EU.

European enforcement of existing rules is lacking, raising questions about the ability of European authorities to protect the European markets and place compliant European companies at a disadvantage. The apparent reward for U.S. issuers employing a “break things first, fix later” approach creates an unfair competition dynamic in Europe.



Read more: The Big Misunderstanding: What MiCA Really Means for Stablecoins in Europe