As the European Union’s Markets in Crypto-Assets Regulation (MiCA) begins to shape the crypto space, French fintech Next Generation and Ireland’s electronic money institution, Decta, have teamed up to introduce a euro-pegged stablecoin. Due on Stellar’s blockchain, the coin (EURT) promises full compliance with MiCA’s set guidelines.
The pioneering regulation’s initial focus was on stablecoins and their issuers, creating a promising environment for stablecoins linked to local currency by furbishing a framework that ensures compliance. While this led to clearing out businesses that could not meet these regulations, it also fortified companies like Next Generation, known for its ties to Tempo France, another significant fintech player.
Tempo France initially launched the EURT in 2017 as one of the first euro-pegged stablecoins but had to suspend it due to a lack of regulatory measures. MiCA, however, classifies stablecoins as electronic money tokens (EMTs), matching them with traditional e-money and requiring issuers to possess an EMI license.
Demand for euro-backed stablecoins currently stands around $30 billion, but with a supply of less than $300 million, the partnership between Next Generation and Decta aims to tap into this massive gap. With a keen eye on competitors like Circle and Tether, the Franco-Irish partnership expects EURT to surge. The stablecoin market also saw its capitalization increase 2.1% in July, reaching $164 billion, underscoring an intensifying interest in the global financial sector.
Stablecoins fall within MiCA’s remit and are paving the way for substantial growth in the euro-backed stablecoin market. Local fintech companies are cashing in on this growing demand, leading to potential currency shifting in forthcoming years.