EU regulator restores limit on cryptocurrency transactions in stablecoins

The EU’s draft law on cryptocurrency regulation (MiCA) has once again added a provision to limit transactions for stablecoins that are not backed by the euro. The limit will be up to 200 million euros per day. The decision was lobbied by the French delegation to the EU Council.

Finally, we have the final text of #MICA following the «most noisy silent process» in the Council. The market impact is still to be calculated concerning stablecoins. https://t.co/OWV9dfrBaQ

— Dimitris Psarrakis (@dpsarrakis) September 29, 2022

The rule on the maximum daily transaction amount was returned a week after it was removed from the document. This step was also supported by representatives of Germany, Italy, and the Netherlands. The new version states that the limit does not apply to stablecoins used to buy cryptocurrencies. However, it can be used for spot trading in assets on cryptocurrency exchanges.

We have a significant development regarding foreign EMTs (eg USDt) in #MiCA. The Council has decided in Art.19a and Rec.42b that if you use stablecoins to buy BTC or any ALTcoin this does not count towards the 200m € threshold, but if the exchange use it to do a pair trading it counts.

— Dimitris Psarrakis (@dpsarrakis) September 28, 2022

The European Parliament’s Committee on Economic and Monetary Affairs is expected to vote on the bill in October or November. As a reminder, in early July, the Council of the European Union and the European Parliament preliminarily agreed on the MiCA bill. It will allow Europe to become the first part of the world to establish clear rules for digital assets. However, the law on cryptocurrency regulation will not include control over DeFi (decentralized financial systems). The European Commission plans to publish a separate report on this issue in 2023 and launch a pilot project for «DeFi supervision». Changpeng Zhao also Binance-pidtrymav-zakonoproekt-pro-regulyuvannya-kryptovalyut-u-yevropi/">supported the EU legislation on crypto asset markets. The Binance CEO believes that it is likely to be adopted globally as a standard for cryptocurrency regulatory policy.