European authorities are also debating how to treat multi-issue stablecoins, such as Circle Internet’s USDC (CRCL), which can be issued by several separate legal entities in different jurisdictions, but presented to users as a single, fungible token.
According to Catarina Veloso, director of regulation and compliance at Notabene, when MiCA was designed, the European Commission clearly intended to support multi-issuance models, a protocol designed to integrate crypto transactions into the everyday economy. But during the implementation phase, different stakeholders within the EU, including the ECB, pushed back because they have their own views on the risks that would result.
The real value of stablecoins is that they are natively global, Veloso said. Imposing geographic limits would create a scenario in which Circle Europe, now licensed by MiCA, would have to build its own fragmented version of USDC for European markets, she said.
“One of the main added values of the stablecoin is that it is not a payment system built in a specific jurisdiction,” Veloso said in an interview. “So that value is diluted by the fact that it is now captured by the regulatory frameworks that exist within borders.”
Take 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).
