It has now become clear that the limit imposed by MiCA on stablecoin transactions could hinder the introduction of cryptocurrencies in the EU.
A limit of 200 million euros on transactions of stablecoins, such as USDT and USDC, could limit and stop the spread of cryptocurrency in the European Union, so experts have called for a review of this framework in the EU Regulation on Markets in Crypto-Assets (MiCA). Recall that the MiCA regulation, which was the world's first regulatory and supervisory guidance for cryptocurrencies, was approved on May 31.
Rachel Cropper-Mawer, Legal Director at law firm Clyde and Co., said the use and distribution of large stablecoins could be suppressed, so regulators should increase the daily limits set, Cointelegraph reported.
"A limit of 200 million euros does not mean a ban," Cropper-Mawer stressed. "But if the limit is reached, issuers will be forced to stop issuing and work with regulators to limit transactions."
Nevertheless, Cropper-Mawer is confident that lawmakers "will be forced to revisit this issue" as the growing popularity of privacy stablecoins will eventually lead to a crackdown on the use of the largest stablecoins.
According to the lawyer, the restrictions arising from the use of stablecoins are governed by the current MiCA regulation, and therefore central bank digital currencies (CBDCs) will spread at a faster rate.
She also added that it is unlikely that the MiCA legislators did not consider the possible negative effects of these restrictions on stablecoins, especially when evaluating the proliferation of private stablecoins in other markets. "If the relatively unfettered use of stablecoins is permitted in other jurisdictions, this could adversely impact the crypto market in the EU."
Experts say the MiCA rules have been largely welcomed by the crypto industry, but one of the most controversial measures remains the $219 million (€200 million) limit on the daily transaction volume of stablecoins, particularly Tether.
Tether Chief Technology Officer Paolo Ardoino said, "Further discussions on the technical implementation standards are crucial in providing clarity to the market over certain provisions, and we look forward to the outcomes of these discussions in due course."
Ardoino did not say how these "legislative features" could potentially affect USDT trading in Europe. And while he praised MiCA for the initiative, he acknowledged that restricting daily trading could affect private stackable coins like USDT.
Our team previously highlighted that it was now possible to buy NFTs on Twitter.