Non-euro stablecoin transaction cap revived in MiCA

Quick Take

  • €200 million cap on non-euro-backed stablecoins said to be back in the EU’s comprehensive digital asset framework. 
  • The move comes less than a week after crypto advocates celebrated its removal. 

A daily transaction cap for non-euro stablecoins has been reinserted into the European Union’s draft rules for cryptocurrencies. The cap will limit transactions using stablecoins denominated in other currencies, like the U.S. dollar, to €200 million transacted per day,  multiple sources confirmed to The Block. 

The French delegation to the EU Council succeeded in reviving the provision, according to several sources tracking the legislative effort. The move comes one week after the technical negotiations on the Markets in Crypto-Assets (MiCA) rules, comprehensive policy for digital assets in the EU, came to a close. Digital asset industry advocates had cheered the removal of limitations on stablecoins backed by currencies other than the euro, though those appear to have made a comeback. 

The newly reinstated provision puts a cap on how much foreign currency-backed tokens are allowed to be transacted within one day, according to Dimitris Psarrakis, head of EU affairs of XReg Consulting. 

“This effectively means e-money tokens will have problems settling transactions of EU-based crypto-asset service providers, negatively affecting the market in the EU,” Psarrakis told The Block.

According to Psarrakis, the French delegation rallied support from Germany, Italy and the Netherlands to reinstate the limitations on non-euro stablecoins on Wednesday. Other industry sources tracking the legislation, who asked not to be named because they did not have permission to speak to press, confirmed the provision's return, and that French officials had pushed for it. 

The period in between the vote on the legislation in the European institutions to formally adopt it is known as a "silent process" in EU terminology, where policymakers are expected to stay quiet if they do not have objections.

“This was a noisy silent process,” Psarrakis said.

The European Parliament’s Committee on Economic and Monetary Affairs is scheduled to vote on the legislation in October or November.


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