Summary
- The European Union is set to revise its Markets in Crypto-Assets (MiCA) regulations in 2027, aiming to include non-EU stablecoin issuers, according to EU diplomats who spoke with Euronews.
- This initiative follows the U.S. GENIUS Act and support from former President Trump for dollar-backed stablecoins, which dominate 95% of the market.
- The European Commission is currently consulting with stakeholders until September 30, after which it will decide on formally revising the law.
The European Union plans to amend its primary crypto regulations to extend oversight to non-EU stablecoin issuers, a move prompted by Donald Trump's promotion of dollar-pegged tokens that has raised concerns among European regulators, as reported by Euronews citing multiple EU diplomats.
The MiCA framework, which was fully implemented on July 1, is already anticipated to undergo changes. "Reopening the file seems unavoidable at this stage," one diplomat mentioned to Euronews, highlighting the influence of European institutions, particularly the ECB, alongside rapid changes in regulatory and technological landscapes worldwide.
Current Gaps in MiCA
The existing regulations do not specifically address non-EU entities that issue stablecoins while operating within Europe, a loophole that Brussels aims to address. Stablecoins are digital tokens tied to real-world assets, typically the U.S. dollar, and since they operate outside traditional banking frameworks, they evade existing banking regulations. Regulating these assets is complicated, as a single stablecoin can be issued by various organizations across different jurisdictions.
The anticipated review is also likely to expand MiCA's focus to include new technologies, such as tokenized payments and deposits, which are expected to gain traction in the coming years.
Influence from the U.S.
This reconsideration is a direct reaction to developments in the United States. Last year, Trump signed the GENIUS Act, establishing a federal framework for dollar-pegged stablecoins, which he has promoted as a means to enhance the dollar's global influence. With approximately 97% of stablecoins globally linked to the U.S. dollar, EU officials express concerns over a potential influx of dollar-based tokens into Europe. The implications are significant, with the total supply of stablecoins increasing by over 50% in 2025, reaching around $317 billion by April, as reported by the Federal Reserve.
MiCA has already transformed Europe’s stablecoin landscape, prompting platforms like Revolut to remove Tether’s USDT stablecoin, thereby benefiting licensed issuers such as Circle.
Concerns Over Sovereignty
The European Central Bank has been a prominent advocate for stricter regulations. President Christine Lagarde has consistently warned that dollar-pegged stablecoins could siphon deposits from banks and undermine the euro's monetary sovereignty, asserting that Europe should develop its own public infrastructure rather than mimic the U.S. approach. In late March, the ECB announced a payments strategy centered around two initiatives, Pontes for the near term and Appia for the long term, aimed at facilitating DLT-based transactions in central bank money.
Currently, the process is in its initial phases. The Commission is collecting feedback until September 30, after which it will determine whether to officially revise MiCA, with any changes expected to be addressed in 2027.