Gate News message, April 27 — The Blockchain for Europe association released a report on Monday that concludes the European Union’s Markets in Crypto-Assets Regulation (MiCA) framework has significantly enhanced the safety of euro stablecoins but simultaneously undermined their commercial competitiveness. Euro stablecoins now account for less than 1% of global stablecoin trading volume, far below the euro’s actual position in global markets.
The report, co-authored by European Central Bank official Ulrich Bindseil and Blockchain for Europe’s Erwin Voloder, identifies two core MiCA restrictions as the primary obstacles: a ban on paying interest to holders, and a requirement that at least 30% of reserves (60% for major issuers) be held as bank deposits. In a positive interest rate environment, the interest prohibition places euro stablecoins at a significant disadvantage compared to bank deposits and foreign currency stablecoins with embedded yield mechanisms. The report argues these combined restrictions trap euro stablecoins in a regulatory “Laffer curve” downturn—where stricter regulation causes the regulated market activity to contract rather than flourish.
The European Union has begun discussions on “MiCA 2.0” amendments. The report recommends replacing rigid reserve ratio requirements with a principles-based framework, allowing a broader range of high-quality euro liquid assets, and permitting large issuers limited access to central bank settlement accounts during extreme market stress. However, the European Banking Authority has warned that proposed technical standard changes could weaken safety safeguards and increase arbitrage risks. The ECB’s April macroprudential analysis similarly noted that widespread euro stablecoin adoption could concentrate short-term eurozone government bond demand, potentially affecting yields and liquidity during large redemptions.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Canada's Bill C-25 Passes House Principle Vote, Bans Crypto Donations to Federal Political Campaigns
Gate News message, April 27 — Canada's "Strong Free Elections Act" (Bill C-25) passed a principle vote in the House of Commons and was referred to committee for detailed review. The bill, which received cross-party support with minimal substantive opposition, proposes to prohibit donations in
GateNews54m ago
Pakistan's Virtual Assets Regulator Requires Prior Authorization for Crypto Service Providers
Gate News message, April 27 — Pakistan's Virtual Asset Regulatory Authority (PVARA) has issued a regulatory notice requiring all virtual asset service providers to obtain prior authorization before commencing operations or making public announcements. The directive brings all virtual asset
GateNews4h ago
EU Announces Largest Russia Sanctions Package in Two Years, Banning Crypto Services and Digital Ruble
Gate News message, April 27 — The European Union has unveiled its most comprehensive sanctions against Russia in two years, imposing a sweeping industry ban on cryptocurrency service providers and platforms established in Russia. The measures also prohibit Russia's central bank digital currency
GateNews5h ago
SEC Chair Paul Atkins Makes History as First Sitting Commissioner to Address the Bitcoin Conference
SEC Chair Paul Atkins is set to deliver a fireside chat at the Bitcoin 2026 conference in Las Vegas on Monday, marking the first time a sitting U.S. securities regulator has spoken at the annual event.
Key Takeaways:
SEC Chair Paul Atkins is set to address the attendees of Bitcoin 2026 in Las Veg
Coinpedia9h ago
Trump Reaffirms Support for CLARITY Act Amid Senate Delays on Crypto Regulation
Gate News message, April 27 — Donald Trump reaffirmed his support for the CLARITY Act at a private gathering at Mar-a-Lago on April 27, stating he would not allow banks to block crypto legislation. The event, which hosted major holders of the Trump-themed memecoin $TRUMP, underscored the political b
GateNews9h ago
CLARITY Bill enters a critical 28-day window! Polymarket: Probability of passing drops to 38%
According to data from Polymarket prediction markets on April 27, the probability that the “Digital Asset Market Clarity Act” (CLARITY Act) will be completed into law in 2026 has fallen from a previous peak of 70% to 38-50%. As of April 27, there are only 28 days left until May 25, 2026, Memorial Day holiday in the United States.
MarketWhisper9h ago
