USDC Becomes Compliant as MiCA Regulations Change Crypto: Expert Analysis

USDC Becomes Compliant as MiCA Regulations Change Crypto: Expert Analysis

On July 1, 2024, stablecoin issuer Circle announced that its France-based unit received an Electronic Money Institution (EMI) license, which will allow the company to issue USDC and EURC stablecoins in a compliant manner across the European Union (EU) region.

Circle is the first stablecoin issuer in the world to comply with the EU’s landmark crypto regulatory framework, the Markets in Crypto-Assets Act (MiCA).

But what does this mean for the stablecoin industry? Let’s find out below.

Key Takeaways

  • The first phase of MiCA regulations was passed in June 2023 in the EU.
  • On June 30, 2024, MiCA rules to regulate stablecoins went into effect.
  • Circle’s USDC and EURC mint and redeem platform called Circle Mint is officially available to business customers across Europe.
  • Experts say regulations will create a “comply or vanish” scenario for crypto issuers in Europe.
  • Anndy Lian says “decentralization might not be a casualty” of the incoming crypto regulatory wave.

What is the Markets in Crypto-Assets Act (MiCA)?

The MiCA is widely regarded as the world’s most comprehensive law that covers how cryptocurrencies are regulated. The first phase of MiCA regulations was passed in June 2023 in the EU.

On June 30, 2024, MiCA rules to regulate stablecoins went into effect.

Issuers are now required to hold MiCA licenses to publicly offer and trade cryptocurrencies and stablecoins within the EU region.

Under the MiCA rules, issuers are required to stop the issuance of non-euro stablecoins if they exceed a limit of over 1 million stablecoin transactions or if the value of stablecoin transactions exceeds 200 million euros.

Other MiCA compliances require issuers to have an office in an EU country, implement anti-money laundering rules, and disclose risks about issued cryptos, a portion of reserve funds held as bank deposits, among others.

The final phase of MiCA regulations will be implemented by the end of 2024.

Crypto research firm Chainalysis said: “Previously, frameworks focused solely on anti-money laundering and counter-terrorist financing. MiCA aims to unify the currently fragmented regulatory landscape by establishing harmonized rules, providing legal certainty, protecting consumers and investors, and supporting the integrity and stability of the European financial system while fostering innovation.”

USDC Stablecoins for Financial Institutions

Now that Circle is compliant with MiCA’s regulatory obligation for stablecoins, it has opened up a new market for its USDC stablecoin.

Circle’s USDC and EURC mint and redeem platform called Circle Mint is officially available to business customers across Europe.

Institutions will now be able to leverage near-instant settlement, low transaction costs and 24/7 availability of Circle’s stablecoins. Businesses will also be able to provide stablecoin access to their customers through their app or website.

 

Incoming Crypto Regulations Means ‘Comply or Vanish’

The landmark stablecoin regulation introduced in Europe points to a future where only compliant stablecoins are considered legal and, therefore, easily accessible to the public through centralized crypto exchanges (CEX).

“Stablecoin offerings, both local and global, will either comply or ultimately vanish from the EU market in the short to mid-term, as evidenced by recent announcements from exchanges like Binance, Bitstamp, Kraken, OKX and others that are either delisting or phasing out non-compliant tokens,” said Circle’s Dante Disprate and Patrick Hansen in a blog post for The Bretton Woods Committee.

The duo added that the stablecoin industry in the EU will consolidate around regulated tokens. They said that the EU crypto market is expected to undergo “a massive transformation” as clear regulations and strong protections increase the EU’s competitiveness to host the next evolution of the crypto industry.

Expert views: Future of Stablecoins and Decentralized Finance

In conversation with Techopedia, Anndy Lian, an intergovernmental blockchain expert, said compliant stablecoins are poised to be a “tipping point” that has the potential to supercharge stablecoin adoption globally.

Lian said:

“Regulations build trust, especially for remittance and dollar exposure, attracting new users. Integration with traditional finance unlocks wider applications for payments and financial products … Challenges remain, but compliant stablecoins have the potential to supercharge global adoption.”

When asked about the future of decentralized finance (DeFi) in the face of inevitable crypto regulations, Lian added that “decentralization might not be a casualty” of the regulations that are currently reshaping the crypto landscape.

“The dream of a decentralized future for cryptocurrencies doesn’t have to be squashed by upcoming regulations. Instead, crypto can adapt and even thrive alongside these new rules.

 

“Regulations might not extinguish the desire for decentralization, but rather create a parallel, regulated crypto space that coexists with the existing one.”

The Bottom Line

The crypto industry is evolving with incoming regulations for the better or worse depending on how you look at it. The MiCA regulations are only the start as more regions including the US are yet to implement crypto rules in their jurisdiction.

One thing is for certain. The MiCA rules will deeply influence how regulations are framed in other nations.

 

 

Source: https://www.techopedia.com/usdc-becomes-compliant-as-mica-regulations-change-crypto-expert-analysis

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Facebook becomes Meta- What is next?

Facebook becomes Meta- What is next?

Facebook recently announced at the company’s Connect event that it has changed its name to Meta. Many people may be a little curious about the word Meta, which means beyond in Latin. As CEO Mark Zuckerberg said in a letter published to accompany the event, “I used to study Classics, and the word “meta” comes from the Greek word meaning “beyond”. For me, it symbolizes that there is always more to build, and there is always a next chapter to the story.”

 

At the same time, Facebook announced that it would soon change its NASDAQ stock ticker symbol from FB to MVSE starting on December 1. As reported in The Verge, which first interviewed Zuckerberg in July, the change in name is in part motivated by a strategic shift from being known primarily as a social media company to focus the metaverse plans. This is reflected in the reporting of financial results, rather than the company’s structure, splitting between apps and metaverse related products.

 

Facebook is not just changing its name. “All of our products, including our apps, now share a new vision: to help bring the metaverse to life. And now we have a name that reflects the breadth of what we do,” confirmed Zuckerberg.

 

But is that the full story behind the shift? Indeed, there’s speculation that a primary goal may be to make its crypto wallet Novi a game-changer. Currently, Novi is pitched as simply a “digital wallet that helps people send and receive money internationally — instantly, securely, and with no fees”.

 

But if the plan works, Novi may become the digital interface for all encrypted assets, from cryptocurrencies to NFTs, in the metaverse that Meta is planning to create.

 

Why did Facebook change its name?

 

Zuckerberg admitted that Facebook as a brand was stuck in the past being regarded as a social media company. Put simply, the renamed Meta now represents more than a re-skinned Facebook concept.

 

“Right now our brand is so tightly linked to one product that it can’t possibly represent everything we’re doing today, let alone in the future. Over time, I hope we are seen as a metaverse company, and I want to anchor our work and our identity on what we’re building towards,” says Zuckerberg.

 

Now Facebook is just one of Meta’s suite of products:

 

WhatsApp – messaging app

Oculus VR — virtual reality (VR)

Onavo — mobile network analytics

Beluga — messenger service

Instagram — photo and video-sharing app

 

What role will the Novi wallet play?

 

Whether Meta’s goal is to become the backbone of the crypto field or replicate the success of crypto-asset exchanges, Meta hopes to join the crypto field based on Zuckerberg’s remarks. Facebook recently announced a pilot project in collaboration with Coinbase and Paxos. They enticed users to try it by promoting Facebook’s digital wallet, Novi, to users in the US and Guatemala shortly before the name change announcement in October. The aim is to allow the business to “evaluate the wallet’s core functions and showcase operational capabilities, specifically those around customer service and compliance. Novi is also being designed for interoperability with other digital wallets,” according to a report in Cointelegraph.

 

As early as 2019, Facebook attempted to enter the crypto field by launching its own token Libra, but it ultimately failed. Finally, under the combined pressure of the US Central Bank and policymakers, the token was forced to cancel. Libra was later tweaked, relaunched, and renamed Diem. The spokesperson stated that the company has not abandoned support for the Diem network, a permissionless payment system that is still awaiting the green light from Washington. “We intend to launch Novi with Diem once it receives regulatory approval and goes live,” the spokesperson told Cointelegraph.

 

It may be surprising that the Novi project has been heavily criticized by some US senators who oppose Facebook’s relaunch of cryptocurrency and digital wallets. But the response from Diem, the associated stablecoin project, shows how challenging these organizational changes maybe for regulators and lawmakers. In response to the letter calling on Facebook to halt its stablecoin and crypto wallet projects, Diem stated that it “Diem is not Facebook. We are an independent organization, and Facebook’s Novi is just one of more than two dozen members of the Diem Association. Novi’s pilot with Paxos is unrelated to Diem.”

 

Despite the senators’ criticism, the Novi encrypted wallet project has certainly not given up. It will likely play an essential role in Meta’s future crypto provision. According to relevant information, as Facebook becomes Meta, its payment and financial services and Novi are being integrated. Meta plans to unify all payment methods and financial services under the Novi brand in the future, with significant implications for its metaverse business offering in the future. In a recent report UK-based blockchain VC Outlier Ventures confirmed the need for the metaverse to have a crypto decentralized core, with its own payment system as key: “The defining characteristic of a true Metaverse is that it needs its own economy and currencies native to it, where value can be earnt, spent, lent, borrowed or invested interchangeably in both a physical or virtual sense and most importantly without the need for a government.”

 

Crypto, NFTs and the Metaverse

 

Vishal Shah, Facebook’s head of metaverse products, said the aim was to enable “as many creators as possible to build a business in the metaverse.” Shah underlined the importance of the diversity of creators in the metaverse: “Creators who make digital objects, creators who offer services and experiences and those who build entire worlds like game creators do today.” In turn, the diversity of creators will be reflected in the diversity of business. And in underlining this point about “new types of ownership models,” he pointed out the role of NFTs, with the new Meta platform making it easier “to sell limited education digital objects like NFTs, display them in their digital spaces and even resell them to the next person securely”.

 

Crypto experts such as Anndy Lian, Chairman of BigONE Exchange commented earlier last week on Twitter too: “#Meta means beyond in Greek. Are you ready for it’s future? I am.” Ben Armstrong ALA Bitboy is also bullish on metaverse projects too. He mentioned this on his Tweet too: “Are you bullish on #metaverse projects? These are gaining more and more traction.”

 

All in all, I have to say this- Metaverse is the future.

 

 

 

Original Source: https://hackernoon.com/facebook-becomes-meta-what-is-next

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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