According to the source, an EU risk watchdog warned that current stablecoin safeguards may be insufficient, elevating regulatory and liquidity risks for tokens used on European venues. Source: the source. Under MiCA, issuance and offering of asset-referenced tokens and e-money tokens in the EEA require authorization from 30 June 2024, with strict rules on reserve quality, 1:1 redemption at par, and liquidity stress testing, which can affect market-making costs and available pairs for USDT and USDC. Source: European Banking Authority 2024. The EBA issued technical standards and guidelines detailing reserve composition, liquidity risk management, stress testing, and recovery plans for stablecoin issuers, tightening operational requirements that can influence spreads and funding rates on compliant pairs. Source: European Banking Authority 2024. EU-facing exchanges have already restricted access to unauthorized stablecoins to comply with MiCA, signaling potential shifts in spot and derivatives liquidity toward euro and MiCA-compliant stablecoin pairs. Source: Binance 2024. The ECB has highlighted repeated de-pegs of major stablecoins during past stress events, underscoring redemption and liquidity risks that regulators aim to contain, which can translate into episodic dislocations in EEA trading books if safeguards are found lacking. Source: European Central Bank 2024.

According to @6529Guardian, the EU would have been better off accepting and regulating Libra, highlighting the policy trade-offs around global stablecoins and market structure (source: @6529Guardian on X, 9 Sep 2025). Libra rebranded to Diem in 2020 and subsequently sold its assets in 2022 after sustained regulatory opposition, effectively ending the project (source: Diem Association announcement, 1 Dec 2020; Diem Association press release, 31 Jan 2022). The EU instead implemented MiCA, with stablecoin provisions applying from 30 June 2024 that require issuer authorization, robust reserves, redemption at par for e-money tokens, and EBA/NCA supervision (source: Regulation (EU) 2023/1114, Official Journal of the European Union, 9 June 2023). MiCA limits offering and marketing of stablecoins in the EU to authorized issuers and sets disclosure, governance, and risk-management standards, reshaping which stablecoins can be listed on EU-facing platforms (source: Regulation (EU) 2023/1114, Titles III and IV; European Banking Authority supervisory statements, 2024). Stablecoins serve as core settlement rails for crypto trading, so regulatory constraints directly affect BTC and ETH order-book liquidity and spreads on exchanges (source: Bank for International Settlements Quarterly Review, September 2022, Stablecoins: risks and regulation; European Central Bank Financial Stability Review, 2023). Issuers have adjusted: Circle secured an e-money institution license in France in 2024 to bring USDC and EURC under MiCA, reinforcing euro-denominated stablecoin rails for EU participants (source: Circle press release, 1 July 2024; Autorité de Contrôle Prudentiel et de Résolution announcement, 1 July 2024).