Circle and Tether find common ground against MiCA's bank reserve rules

What happened

Circle and Tether have put forward a longer-term proposal that would require Commission equivalence and EBA issuer recognition before their stablecoins could be distributed through a locally licensed institution. The plan is not yet final.

Proposed

Global impact / market context

Stablecoin issuers Circle and Tether would need European Union approvals before reaching local users, which could raise their costs and slow growth. Investors holding USDC or USDT should watch whether this proposal becomes law, as that would change how these coins reach European buyers.

Analyst inference

The proposal targets MiCA's bank reserve rules, which means rules on how much cash and safe assets stablecoin issuers must hold. If approved, it would add a licensing step for distribution in Europe, potentially shifting how USDC and USDT compete there.

Analyst inference

What to watch

1. Watch whether the proposal moves forward, since it currently requires Commission equivalence and EBA issuer recognition before distribution through a locally licensed institution. Confirmed
2. If adopted, Circle and Tether would need both approvals before distributing through a locally licensed European institution, which means a licensed local bank or similar firm. Proposed
3. Investors could see higher costs or slower European access for USDC and USDT if issuers must secure extra approvals, potentially altering their competitive position against other stablecoins. Analyst inference

Affected assets

• USDC — USD Coin
• USDT — Tether

Evidence

• cryptoslate.com