MiCA became law 3 years ago, now Europe’s crypto framework is undergoing a rethink

European authorities are also debating how to treat multi-issuance stablecoins, such as Circle Internet’s (CRCL) USDC, which can be minted by multiple distinct legal entities across different jurisdictions, yet presented to users as a single, fungible token.

When MiCA was designed, it was definitely the European Commission’s intention to support multi-issuance models, according to Catarina Veloso, director, regulatory and compliance at Notabene, a protocol designed to bring crypto transactions into the everyday economy. But during the implementation stage, different stakeholders within the EU, including the ECB, pushed back because they have their own views on the resulting risks.

The real value of stablecoins is that they are natively global, said Veloso. To impose geographic limits would create a scenario where Circle Europe, now licensed under MiCA, would need to build its own fragmented version of USDC for European markets, she said.

“One of stablecoin’s main value-adds is that it’s not a payment system built within a specific jurisdiction,” Veloso said in an interview. “So that value is diluted by the fact it’s now being captured by regulatory frameworks that do exist within borders.”

Taking control

Unrelated to stablecoins, another key area of discussion is the possibility of more centralized control of MiCA, under the auspices of the European Securities and Markets Authority (ESMA).