The MiCA transition and stablecoin divergence

Circle’s regulatory journey involved several stages. It began with registration as a US money transmitter in 2021 and obtaining a DASP license in France in 2022. Circle applied for an EMI license in Ireland in 2023 before securing the EU-wide approval in 2024. The Electronic Money Institution license Circle secured in 2024 permits the issuance and redemption of USDC and EURC across 30 countries in the European Economic Area and covers all EU member states plus Iceland, Liechtenstein, and Norway. Both USDC and EURC maintain 1:1 fiat backing with monthly Deloitte attestations. I see the EURC market cap rose from $37.85 million in mid-2022 to $257.99 million by 2026. This contrasts with Tether, which stopped new issuance for EURT in 2022 and set a redemption deadline for holders of November 25, 2025. Tether’s EURT market cap fell to $27 million. I observe that Tether chose to focus on projects that meet market demands instead of complying with MiCA. Circle also signed a memorandum of understanding with Deutsche Borse to list stablecoins on the 3DX exchange and via Crypto Finance.

National regulators ended transition periods at different times. Germany’s grandfathering period for KWG crypto-custody licenses ended on December 31, 2025. This KWG regime, which began on January 1, 2020, covered the safekeeping and administration of crypto-assets. Firms in Germany that continued providing crypto-custody services after the December 31, 2025 deadline without a granted MiCA CASP authorisation or a valid passport from another Member State now operate in breach of the law. As of October 7, 2026, the ESMA register lists 100 firms in Germany, many of which are banks. BaFin typically takes 6 to 12 months to process fresh applications. France ended its transitional period on June 30, 2026, following the closure of the PSAN registration regime on December 30, 2024. The French regulator AMF grants authorization only after the ACPR provides its opinion, and directors face two years in prison if they attempt to provide crypto-asset services without this specific MiCA CASP status. Unauthorized activity also carries a €30,000 fine. The AMF completeness check takes 25 working days. A decision follows within 40 days. You should verify your specific jurisdiction’s deadline before assuming grandfathering still applies. Poland lacks a local framework because President Karol Nawrocki vetoed the implementing bill three times, with the last veto on June 11, 2026.

Capital requirements depend on the service class.

The EBA proposed technical standards to specify liquidity requirements. These rules require reserves to have a maturity between 1 and 5 working days. These rules include minimum creditworthiness and concentration limits for deposits. CASPs must also comply with DORA ICT risk management requirements and implement AML/KYC protocols like electronic ID verification and transaction monitoring. CASPs must maintain records for a minimum of five years. I think the capital floor is only the start because firms must also hold one quarter of their fixed overheads from the previous year. I’ve seen that the higher requirement for overheads often hits growing firms harder than the base floor. The EBA also proposes overcollateralisation of assets and specific minimum amounts of deposits with credit institutions in each official currency. Does the higher overhead requirement make small firms struggle more?