2 New Stablecoins Shake Up Crypto!

With MiCA, Europe displays a clear ambition: to set strict and transparent rules for stablecoins before turning to other crypto-assets. This unprecedented regulatory framework aims to reassure users and investors while aligning the practices of issuers. Today, two stablecoins, EURQ and USDQ, are entering the European market with the support of heavyweights like Tether and Kraken. But what do they really offer?

New stablecoins supported by Tether and Kraken

Is this truly the end of cash in Europe? November 18 marks a key milestone for digital payments on the Old Continent with the launch of two stablecoins compliant with the MiCA regulation: EURQ and USDQ. These tokens, respectively backed by the euro and the dollar, are entirely backed by reserves in fiat currency and registered as e-money tokens with the Central Bank of the Netherlands.

Tether Investments invested in Quantoz, a company issuing 2 MiCAR-compliant European grassroots stablecoins (EURQ and USDQ), leveraging our new Hadron by Tether technology platform, for tokenizing any asset in the world, from stablecoins to equities, bonds, funds, real-estate and… https://t.co/cu4Wery2Au

— Paolo Ardoino 🤖🍐 (@paoloardoino) November 18, 2024

Supported by major players such as Kraken, Tether, and Fabric Ventures, these stablecoins promise:

• Fast and transparent transactions;
• A 1:1 coverage by fiat, strengthened by an additional reserve of 2%;
• Adoption for both businesses and individuals in Europe.

Anil Hansjee, General Partner at Fabric Ventures, aptly summarizes this enthusiasm:

“Europeans applaud MiCA for the simplicity it brings to stablecoin issuers.”

The tokens will be listed on Kraken and Bitfinex starting November 21, paving the way for regulated and accessible usage throughout the region.

MiCA and crypto companies: between opportunities and limits

While MiCA lays a solid foundation, it does not have unanimous support among crypto ecosystem players. Paolo Ardoino, CEO of Tether, has raised the alarm over a regulatory requirement: issuers will need to keep at least 60% of their reserves in European banks.

He fears that this could amplify systemic risks, especially if these banks lend out up to 90% of their assets.

Meanwhile, Norway, although aligned with MiCA as an EEA member, is still considering its next steps for CBDCs (central bank digital currencies). Kjetil Watne, project director at Norges Bank, has stated that further adjustments may be necessary to maintain financial stability.

It is essential to decode MiCA with clarity, distinguish fact from fiction: although ambitious, this framework does not apply to foreign stablecoins, and its limitations, particularly regarding bank reserves, deserve our full attention.