Challenges for Stablecoin Issuers in Europe
A significant challenge has arisen for stablecoin issuers in Europe due to inadequate preparation for the Markets in Crypto-Assets (MiCA) regulation, which has hampered their operational capabilities. Recent data from the European Securities and Markets Authority (ESMA) reveals that out of around 23 companies authorized to issue electronic money tokens (EMTs), only nine have successfully secured full authorization that encompasses both the issuance of EMTs and the provision of crypto-asset service provider (CASP) operations. As a result, the remaining 14 issuers are ensnared in a regulatory limbo.
Regulatory Constraints and Competitive Landscape
Patrick Hansen, who leads Circle’s EU Strategy and Policy, highlighted the constraints faced by issuers, noting,
“Most stablecoin providers in the EU are unable to offer custodial services for their own tokens on behalf of clients, which greatly limits their service offerings.”
This lack of readiness has left many in the sector astonished, particularly as they see Circle and its partner Société Générale-Forge benefit from this regulatory fragmentation, gaining a competitive edge in attracting institutional investors.
Impact on Retail and B2B Operations
Retail users, however, continue to enjoy the ability to freely transfer euro stablecoins among their non-custodial wallets, while business-to-business (B2B) operations have taken a significant hit. Without a CASP license, these issuers are prohibited from holding tokens in custody or managing automated payouts for corporate clients. The pathway to obtaining a CASP license is lengthy—companies must navigate a notification procedure outlined in Article 60 of MiCA, which can stretch from several months to a full year, particularly in major jurisdictions like France and Luxembourg.
Strategic Partnerships and Future Outlook
In light of these delays, many issuers are pivoting toward partnerships with regulated third-party platforms. One striking example is the French stablecoin EURØP by Schuman Financial, which retains EMT status but lacks CASP authorization. To manage its assets effectively, Schuman Financial has adopted Ripple’s European MiCA-compliant CASP and electronic money institution (EMI) licenses for custody and token transfers to clients across 30 European nations.
Industry stakeholders anticipate that this disparity in regulatory preparedness will persist, allowing Circle and Société Générale-Forge to maintain their advantages in the institutional capital landscape within the European Economic Area (EEA). Until the euro stablecoin market evolves past this phase of forced alliances, direct competition over products may remain stagnant.
