e-Money ceases support for the EEUR stablecoin. The MiCA bill is one of the main reasons for this decision, which in its current form will hinder the scalability of EUR-backed stablecoins and limit business opportunities in the sector for everyone except for commercial banks.
e-Money announced the shutdown of its EEUR stablecoin project backed by EUR. The asset was deployed in the Cosmos ecosystem. Stablecoin support will be completely halted on March 6. Until then, users can exchange their EEUR for other digital assets on the decentralized exchange Osmosis.
Representatives of e-Money gave several reasons for this decision:
- The lack of in-demand blockchain products in the Eurozone. Consequently, there’s a low demand for stablecoins that aren’t backed by the dollar.
- The stablecoin sector relies heavily on integration with traditional finance, and financial institutions’ interest in crypto has waned since the 2022 events.
- The MiCA bill, once enacted, would substantially limit business opportunities in the sector to anyone other than commercial bankers.
“European MiCA legislation in its current form favors commercial banks as future issuers of Euro stablecoins,” e-Money said in a press release. According to representatives of the company, this situation will negatively affect the introduction of innovative financial instruments in the European Union.
Recall that the European Parliament (EP) pre-approved the Markets in Crypto-Assets (MiCA) bill, which, among other things, will impose restrictions on uncollateralized cryptocurrencies and stablecoins, as well as regulate the Crypto-Asset Services Providers (CASP). However, in October 2022, the European Parliament postponed the final voting on the bill until 2023. The MiCA would take effect 18 months after passage, so it won’t come into effect until 2024.
