Regulation
Cryptocurrency firm Circle gets French license for stablecoin
Launched in 2018 by cryptocurrency firm Circle, USDC is now the world’s second-largest stablecoin, with over $30 billion worth of tokens in circulation.
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Cryptocurrency firm Circle announced Monday that it is now registered as an electronic money institution, or EMI, in France, granting it a key license to become a stablecoin issuer that complies with the European Union’s strict cryptocurrency laws.
Circle, which is mainly known for its USD Currencyor USDC, a stablecoin, said in a statement that it has received an e-money license from France’s banking regulator, Autorite de Controle Prudentiel et de Resolution, or ACPR.
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The license makes Circle the first global stablecoin issuer to achieve compliance with the European Union’s regulatory framework for cryptocurrency markets (MiCA), the company said.
Circle added that the approval will mean both its USDC and Euro Coin, or EURC, tokens will now be issued in the EU in compliance with MiCA’s stablecoin regulatory obligations. The company said it is also opening its Circle Mint, which allows businesses to mint and redeem Circle stablecoins, in France.
“Since our founding, Circle has sought to create a durable, compliant, and well-regulated stablecoin infrastructure,” Jeremy Allaire, Circle co-founder and CEO, said in a statement Monday.
“Our membership in MiCA, which represents one of the most comprehensive cryptocurrency regulatory regimes in the world, represents a huge milestone in bringing digital currency to scale and mainstream acceptance,” Allaire added.
Stablecoins are a type of cryptocurrency that is backed by traditional assets, usually government-issued currencies like the U.S. dollar. Investors hold them to avoid the volatility seen in other cryptocurrencies like bitcoin.
They are also a key way to make quick cryptocurrency transactions, freeing users from having to rely on fiat currencies held in bank accounts.
Last year, EU regulators passed the world’s first comprehensive law governing how cryptocurrency companies should operate. The law outlines rules specifying how companies should establish investor protections and ensure their platforms are not vulnerable to manipulation.
The law, known as MiCA, officially came into force in May 2023.
However, the regulations governing stablecoins were only approved last week. These measures were considered particularly severe, as they imposed limitations on how much trading could be done in certain stablecoins, particularly those denominated in US dollars.
Under the rules, companies must stop issuing stablecoins denominated in currencies other than the euro, used as a “medium of exchange,” if they exceed a threshold of more than 1 million transactions or a value exceeding 200 million euros ($215.2 million) per day, according to Article 23 of the MiCA.
Circle said it is now able to offer its services, including the ability to mint and redeem USDC through Circle Mint, to customers not only in France, but across the European Union.
This is because, according to MiCA, cryptocurrency companies can offer their services in one EU country and “transfer” them to other markets within the bloc.
The remaining obligations set out in the MiCA, which concern cryptocurrency service providers, will become applicable by 30 December 2024. After that date, cryptocurrency companies will have until July 2026 to fully comply with the MiCA.
Launched in September 2018 by Circle and cryptocurrency exchange Coinbase, USDC is now the world’s second-largest stablecoin, with $32.4 billion in tokens in circulation, according to CoinGecko data. It is second only to Tether’s USDT, the world’s largest stablecoin with $112.7 billion in circulation, according to CoinGecko.