The French and Irish tech firms operating in the region are working together in order to launch a new euro-backed stablecoin. The token launch is going to take place on the Steller network and comes after a month of MiCA regulation implementation. The European Union (EU) approved the MiCA laws earlier this year.
Regulatory Guidelines for Stablecoins
The regulatory framework has started to come into effect at a gradual pace with some of its provisions getting activated in July. The main focus of these regulations is to shape the local stablecoin projects and implement guidelines for their issuers.
These policies have cleared up market participants who are unable to complete the regulatory requirements and maintain a safe space for stablecoins that are pegged to local fiat.
The new partnership going on between French firm Next Generation and Irish Decta is working on launching a new stablecoin. Decta is an electronic money institution (EMI) that recently published the plans to issue a new stablecoin EURT on the Stellar network. The initiative was launched on 5th May and directed towards full implementation of MiCA.
MiCA Gets a Revival in Europe Following the Entrance of Foreign Firms
Next Generation is working in tandem with Tempo Finance. This firm first introduced EURT in 2017 and it is working with Stellar Foundation to lay the foundation of euro-pegged stablecoins.
However, at the time there were no regulatory frameworks available to ensure a suspension for the project. At the same time, the MiCA stablecoins have been listed as electronic money tokens (EMTs) and makes them part of the e-money ecosystem.
In this regard, the stablecoin issuers in this region have EMI licenses or credit institutions as required by the law. MiCA has brought regulatory clarity in Europe that has resulted in strengthened the position of euro-backed stablecoins. In this manner, the sector has become more attractive and manageable for investors.
One analyst also talked about the broader impact of MiCA regulations. They noted that the expected shift into euro-backed stablecoins has been growing in the context of rising demands among European investors.
Decta has also received authorization from the Central Bank of Ireland to operate as an EMI. The firm is going to use this license to issue EURT and bring full regulatory implementation. Suren Hayriyan, the president of Next Generation is projected to be a $30 billion marketplace. This joint venture is working on addressing the gap following the implantation of MiCA as an expansion trajectory for EURT.
European Stablecoin Issuers Rush to Capture Market Share
Currently Circle the second largest stablecoin issuer in terms of market cap is touted as the biggest player in Europe. The leading stablecoin from Circle in the region is EURC and Tether its largest rival has issued EURT.
In the words of Hyriyan, these two market players are identified as the main competitions within the stablecoin sector. MiCA regulations will go into full effect in Europe by the end of the ongoing year.
At the same time, the strong regulatory implementation and technical infrastructure have remained strong in the evolving marketplace. The executive retained that Next Generation and Decta are planning to launch EURT in October.
Circle becomes the first stablecoin issuer to implement MiCA policies in Europe and has based their operations in France. The firm noted that the decision as a forward-looking plan to base their operations in terms of European regulatory compliance.
The activation of MiCA has the potential to encourage growth within the euro-backed stablecoin industry. Some of these predictions expect a minimal 15 billion euros 2025, 70 billion euros in 2026, and 2 trillion euros by 2028.
At the conclusion of last month, the market cap of European stablecoins increased by 2.1% and reached $164 billion. Since April 2022, this metric has recorded the highest level with stablecoins such as USDC reporting a trading volume increase rate of 48%.
