Stablecoins are doomed to disappear, says Binance

The European Union (EU) is currently preparing for the implementation of the MiCA crypto standards. This law aims to regulate stablecoins. Today, this regulation is sparking debates and concerns regarding its impact on the crypto market, especially on stablecoins.

The EU’s landmark MiCA law takes effect next year, but it’s not clear how it will apply to foreign or decentralized issuers.

A @Binance executive warns that the rules could mean a large-scale delisting of stablecoins. https://t.co/ulVFIcgN3e pic.twitter.com/M4FYCaSuW8

— CoinDesk (@CoinDesk) September 21, 2023

In brief

• The implementation of the MiCA law raises concerns about the future of stablecoins.
• According to Binance, stablecoins are likely to disappear.

What the MiCA crypto regulation implies for stablecoins

Adopted in May 2023, the EU’s new MiCA crypto regulation will come into effect next year. It aims to regulate stablecoins in Europe. But that’s not all! Finalized last June, the MiCA law will also make the EU a major crypto jurisdiction with comprehensive regulation.

It notably allows platforms and wallets to operate throughout Europe with a single license. However, some uncertainties remain about the application of this crypto standard to foreign issuers and decentralized projects.

An uncertain future, according to crypto exchange Binance

“The implementation of the MiCA regulation may lead to widespread removal of stablecoins,” said an executive at Binance. Marina Parthuisot of Binance France even predicts the removal of crypto stablecoins in Europe by June 30 without approval.

To align with this viewpoint, the European Banking Authority (EBA) also expresses uncertainties about the law’s application to decentralized and foreign issuers (with no grace period for coins already in circulation).

Challenges for stablecoin issuers and future prospects

The MiCA regulation could pose challenges for stablecoin issuers as it requires them to be based in the EU. This raises questions about:

• Decentralization
• The possibility for foreign issuers to register through EU-based crypto providers.

MiCA rules are indeed very strict and without a transition period, causing concerns among crypto market participants.

Binance is not the only one facing obstacles. According to Thomas Vogel of Latham & Watkins, decentralization is also a crucial challenge for issuers.

In any case, the EU’s MiCA law is reshaping the stablecoin landscape in Europe. Their adaptation to these regulations will determine the future of these crypto assets.