For the cryptocurrency industry’s existential ties with the banking sector, MiCA represents a significant change, but one that only the most serious players can handle. For example, in the resurgent stablecoin arena, where the dollar is the base currency, MiCA means a so-called fiscal cliff, where unregulated or non-compliant tokens will eventually be delisted by cryptocurrency exchanges or their access will be severely restricted. The reason is simple: instead of treating stablecoins like fringe financial instruments or mere poker chips in cryptocurrency casinos, MiCA brings stablecoins into line with long-standing electronic money regulations. Thus, all stablecoins offered by EU cryptocurrency exchanges must comply with electronic money token regulations. This grants token holders the right to redeem them directly from the issuer for the same amount as the underlying currency. This is a way to strengthen collective accountability and consumer protection in the interlinked digital asset value chain, from wallets to exchanges and finally to issuers. Let’s compare this model with the vague standards and lack of careful protections to prevent funds from flowing into the titular stablecoin “Terra Luna.” Had Terra Luna followed state money transfer laws, the U.S. equivalent of electronic money, consumers might have been better protected from the crash.
