The Cardano Foundation has released sustainability indicators for the Cardano network that comply with the EU's Markets in Crypto-Assets (MiCA) regulation. Additionally, after taking effect on June 30, Circle became the first MiCA-approved stablecoin issuer. Meanwhile, Tether introduced a new payment option for people in the Philippines that allows them to pay their social security system (SSS) contributions using USDT.
Cardano Leads the Way With Early MiCA Compliance Updates
The Cardano Foundation, in collaboration with the Crypto Carbon Ratings Institute (CCRI), has released sustainability indicators for the Cardano network that will comply with the Markets in Crypto-Assets (MiCA) regulation in the European Union. The report was released on July 2, and adheres to MiCA’s mandate requiring crypto asset issuers and service providers to disclose sustainability indicators.
The Cardano Foundation partnered with CCRI to ensure rigorous blockchain monitoring and data collection. The report placed a lot of emphasis on Cardano's energy-efficient consensus protocol, which consumes a lot less electricity than proof-of-work protocols. It also includes detailed metrics on the network’s annual electricity consumption, carbon footprint, and marginal power demand per transaction per second. These sustainability metrics align with the draft regulatory technical standards from the European Securities and Markets Authority.
Frederik Gregaard, CEO of the Cardano Foundation, believes it is very important to develop MiCA-compliant sustainability indicators to meet upcoming EU regulations and set a standard for the crypto industry. Gregaard also pointed out that these efforts are vital when it comes to building trust with regulators, investors, and users, paving the way for wider adoption of blockchain technology in a sustainable manner.
Gregaard said this initiative demonstrates how blockchain networks can address environmental, social, and governance (ESG) concerns while still being transparent and effective.
The initial phase of MiCA regulations came into effect on June 30, with further regulations impacting crypto asset service providers set to roll out in December.
EU's MiCA Regulations to Transform Crypto Landscape
The crypto landscape in the European Union is poised to go through some major changes as the first set of new regulations under MiCA have taken effect. This legislation, which is the first to institute uniform market rules for crypto assets in the EU, has been highly anticipated since it was first proposed back in September of 2020.
In April 2023, the EU Parliament approved the MiCA laws, taking a big step forward in regulating the crypto space and recognizing its importance in Europe’s financial sector. On June 9, 2023, MiCA was officially published in the Official Journal of the European Union, and a year later, the first set of regulations is coming into effect.
Industry experts suggest that while government regulation introduces some red tape, it also brings legitimacy, especially to the crypto industry, which has been scrutinized for its volatility and speculative nature. Reinis Znotiņš, executive director of the Latvian Blockchain Association, believes that the introduction of MiCA will have a more positive psychological effect by eliminating doubts about the legitimacy of crypto businesses in the EU. With the EU Parliament's endorsement, these businesses are now recognized as legitimate, operating in a clear legal framework.
Jón Egilsson, former chairman of the supervisory board of the Icelandic Central Bank and co-founder of Monerium, mentioned that while MiCA provides regulatory clarity, it also disrupts the market. Electronic money tokens (EMTs) and crypto-asset service providers (CASPs) will need to comply with the new regulations, which could lead exchanges and wallets to delist non-compliant stablecoins.
Egilsson’s prediction has already proven to be true as exchanges like Uphold, Binance, Kraken, and OKX have delisted stablecoins like Tether. More recently, Bitstamp also announced that it is planning to delist Euro Tether (EURT).
Egilsson suggested that non-compliant stablecoin issuers might exit the EU market, which could then potentially shift attention towards euro-backed stablecoins as demand increases in European markets. Laura Chaput, head of regulatory compliance at Keyrock, agrees with this, and pointed out that the stablecoin market could grow as retail investors gain more confidence from increased regulatory protections.
On June 13, the European Banking Authority (EBA) published reports on Regulatory Technical Standards (RTS) related to EMTs under MiCA, outlining standards effective from June 30. Egilsson stated that regulators might need some time to clarify new regulatory issues, and market players will need to respond to these new requirements. This will probably result in a transition period lasting several months.
For crypto firms in the EU, the biggest concern will be staying informed about regulations and any last-minute changes. According to Egilsson, it is very important to secure proper authorization, and meet strict organizational, governance, and capital requirements. He also pointed out that stablecoin issuers already authorized as e-money institutions will face some new requirements but not a fundamental change in their operations.
In the medium term, increased competition is expected as larger institutional players enter the market thanks to the legal clarity provided by MiCA. Chaput mentioned that some businesses might even attempt regulatory arbitrage, but the new landscape could also open doors for established financial institutions to enter the stablecoin market.
Circle First MiCA-Approved Stablecoin Issuer
On July 1, Jeremy Allaire, co-founder and CEO of Circle, announced that the firm became the first stablecoin issuer in the European Union to gain regulatory approval under the EU’s MiCA regulatory framework. Circle’s USDC and EURC are now regulatory compliant under the new rules, effective immediately. As such, investors can rest assured that they do not need to redeem their stablecoins or transfer their funds to other digital assets to remain compliant.
Allaire also revealed that Circle chose France as the company’s European headquarters. This choice was made mostly because of France’s progressive stance on digital asset regulation and Circle’s collaborative relationship with the French Prudential Supervision and Resolution Authority (ACPR). He is also very excited about the historical significance of the European Union’s regulatory overhaul, as it is the first comprehensive regulatory framework for digital assets and a testament to the evolution of the asset class since its inception.
Allaire stated that the concept of fiat digital currency was almost non-existent outside early crypto circles, and now, major global laws have invited stablecoins into the financial system.
USDT Now Accepted as SSS Payments in the Philippines
Despite the fact that a number of exchanges delisted USDT to comply with MiCA regulations, the stablecoin is still forging ahead. In fact, Tether has introduced a new payment option for people in the Philippines, allowing them to pay their social security system (SSS) contributions using its stablecoin, USDT.
The SSS is a state-run social insurance program that provides support to employees in both formal and informal sectors, offering financial assistance during challenging times through the social security program and the employees’ compensation program.
Tether partnered with Uquid, a Web3 shopping and infrastructure firm, to facilitate USDT payments for SSS contributions on the TON blockchain. Uquid is known for its decentralized commerce infrastructure platform, and uses blockchain technology and decentralized finance to offer crypto payment options. With its user base of more than 260 million across various markets, Uquid is well-positioned to support the adoption of cryptocurrencies in daily transactions.
Stablecoins have seen increased demand in recent years, reflecting broader cryptocurrency adoption. Initially serving as an on-ramp tool for centralized exchanges, stablecoins have now become vital liquidity providers in both centralized and decentralized markets. Advocates argue that stablecoins' near-instantaneous transactions and low costs make them ideal for disrupting the payments sector.
