A recent Reuters report suggests that Gemini and Coinbase are nearing regulatory approvals that would enable them to operate across the European Union under MiCA.

Gemini’s application is reportedly advancing through Malta, whereas Coinbase is pursuing authorization in Luxembourg. Although Coinbase did not provide specific details about its licensing efforts, company representatives highlighted Luxembourg as a globally recognized financial jurisdiction.

Implementation of MiCA and Its Impact on Stablecoins

MiCA, which came into effect in June 2024, aims to harmonize crypto regulation across EU member states. This framework is intended to clarify operational standards for companies in the sector and bolster investor protection and market stability.

Full enforcement of MiCA is scheduled for December 2024 after final implementation guidelines from the European Securities and Markets Authority (ESMA). In the early adoption phase, several firms have already secured approval. Bybit was recently authorized to operate in the EU through Austria, and Binance has adjusted its services in Poland to align with MiCA requirements.

The regulation’s impact on stablecoins is also noteworthy. While some see these rules as a step toward clearer oversight, others point out ambiguities, particularly regarding stablecoin issuance. Chainalysis observed that the regulatory text leaves certain elements open to interpretation, especially concerning stablecoin reserves held with European financial institutions.

A significant provision of MiCA mandates that issuers of stablecoins must maintain a substantial portion of their reserves with EU-based financial institutions. This condition has led some issuers, such as Tether, to forego seeking registration within the EU.

Despite these challenges, over ten stablecoins have already been approved under the framework. These include offerings from Circle, Crypto.com, Fiat Republic, and Société Générale. However, adoption appears to be limited in some markets. In Italy, officials at the Bank of Italy indicated that the regulation has not yet driven significant uptake of stablecoins. Instead, market demand seems to favor custodial services and crypto trading infrastructure.