The European Union’s landmark crypto regulation, Markets in Crypto-Assets (MiCA), has officially entered the implementation phase, marking a pivotal moment for the continent’s digital finance landscape. This ambitious framework seeks to harmonize crypto regulations across all 27 EU nations, aiming to bolster consumer protection and stabilize markets. Yet, as the rollout gains momentum, signs of strain are beginning to surface.
Stablecoins: Caught in the Crossfire
Among MiCA’s provisions, the rules governing stablecoins have stirred the pot. As of January 2025, crypto asset service providers (CASPs) have been scrambling to secure licenses to operate legally, navigating a transitional period with varying deadlines across member states. One of the most contentious aspects involves the stringent requirements for stablecoin issuers. They must be authorized within the EU, publish a regulator-approved white paper, and adhere to strict guidelines on reserves, governance, and conflict of interest. Notably, the prohibition on offering interest on tokens removes a key incentive for adoption.
Tether, the world’s leading stablecoin by market cap, has opted out of seeking MiCA compliance. This decision could ripple through the EU’s crypto ecosystem, potentially triggering delistings on exchanges and impacting liquidity and DeFi activities. Paolo Ardoino, Tether’s CEO, voiced concerns at the Token 2049 conference, stating, “The issue isn’t fear of regulations but the dangers MiCA poses to stablecoins and the smaller banking systems in Europe.”
Compliance: A Double-Edged Sword
While Tether takes a step back, others are stepping up. BitGo, a prominent crypto custody firm, has successfully secured a MiCA-aligned license in Germany. This strategic move positions BitGo to cater to institutional clients across Europe, underscoring the diverse responses to MiCA’s regulatory environment. Brett Reeves, head of Go Network and European Sales at BitGo, remarked on the process: “We found that both BaFin and the European regulators have been relatively straightforward to deal with. Sometimes they have difficult questions, but they’re there to make sure that our processes are in place and up to scratch.”
Erwin Voloder, head of policy at the European Blockchain Association, highlighted the importance of consistent national-level interpretation of MiCA. He noted the potential for regulatory fragmentation if guidance from authorities isn’t cohesive, raising questions about the law’s practical execution.
The Road Ahead
As Europe embarks on this regulatory journey, the crypto industry is at a crossroads. MiCA’s implementation is set to shape the future of digital assets in the region, but uncertainties linger. How will the market adapt to these new rules? Will other stablecoin issuers follow Tether’s lead, or will they choose the path of compliance like BitGo?
The stakes are high, and the outcomes remain uncertain. As the EU navigates these uncharted waters, the world watches, curious to see whether MiCA will indeed deliver its promise of clarity and stability or if the cracks will widen. For now, the crypto community in Europe holds its breath, pondering the implications of this regulatory behemoth and its impact on the continent’s digital future.
Source
This article is based on: Europe’s MiCA law is motion, but can the crypto industry keep up?
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
