European stablecoin provider halting issuance amid MiCA, following Binance announcement

Euro-pegged stablecoin issuer Lugh appears to be throwing in the towel ahead of the European Union's Markets in Crypto-Assets Regulation (MiCA) coming into effect. 

"Due to the upcoming entry into force of MiCA and in accordance with its commitment to compliance, LUGH announces the cessation of the issuance of its stablecoin EURL and guarantees the redemption of existing EURLs until August 30, 2024," the Paris-based company posted on its website and on X.

Lugh's announcement comes on the heels of Binance, the world's largest cryptocurrency exchange by trading volume, saying it will soon restrict availability in the EU to stablecoins that are considered "unregulated." While Binance did not single out major stablecoins like Tether's USDT and Circle's USDC, there is concern that European nationals could have their access to the two popular tokens restricted due to MiCA.

In the case of Lugh, the euro-pegged stablecoin's meager circulation has been shriveling in recent months. Circulation for Lugh's EURL token has plummeted from about $2.8 million in March to about $32,000 as of Tuesday, according to DefiLlama, suggesting most holders may have already redeemed their tokens.

Lugh said people could refund their tokens by visiting the issuer's website.

"All EURLs have been and will continue to be guaranteed 1:1 by our reserve account opened at Société Générale and audited monthly by Deloitte," the organization also said.