According to the media, the EU has begun to revisit the MisCA Act on the Regulation of Encrypted Assets Markets. The framework was initially primarily for off-the-shelf encrypted assets, but in recent years there has been an increase in the use of stable currency and monetization in cross-border payments, institutional finance, and it has become difficult for the original design to fully cover the new situation.

Stabilized coins became the focus of the revision

It is mentioned that attitudes towards the currency of stability within the EU are changing. The European Central Bank has warned many times in the past that dollar-stable currency expansion could weaken euro-zone control over monetary conditions. However, some policymakers are now more tolerant of the currency of stability, at least in the case of holding it in a bank ' s balance sheet, or in the case of remittances.

Unlike the United States, MiCA is now requiring the stabilization of the currency-related deposit return banking system, and under the United States GENIUS Act, reserve assets can be allocated to such instruments as US Treasury debt. The report cites industry sources that the European Commission is considering whether to reassess this reserve requirement and discuss arrangements that would allow for a closer approach to the United States model.

The flow of bank deposits remains a concern

Whether or not a stabilizer can distribute the proceeds to the holders remains an issue that the EU and the United States alike cannot circumvent. The banking sector has long opposed such designs because of concerns about the transfer of funds from bank accounts to chain wallets, thereby weakening the deposit base.

The report suggested that the European Commission might look at the topic again, but that there was little chance of a clear relaxation in the short term. For European regulators, in addition to the distribution of proceeds, the location of reserve assets, how they are accounted for and who bears the risk remain sensitive.

The USDC model and the regulatory division of labour are also under discussion.

Another controversy is the multi-subject distribution model. In the case of USDC, it can be issued by multiple legal entities in different jurisdictions, but it remains the same fungible token for users. It was reported that the MiCA design was originally intended to support such models, but in the landing phase, the ECB and others expressed more reservations about the risks.

In addition to a stable currency, the EU is also discussing the need for further concentration of regulatory powers. At present, the day-to-day regulation of MiCA is carried out primarily by the competent agencies of member States. If more powers are to be taken to the European level in the future, the text of the statute will need to be amended simultaneously. The EU has also taken the opportunity of this revision to refocus the division of labour between existing financial rules such as the MiCA and MiFID.

Additional information:It was mentioned that the consultation period, known as “MiCA 2.0”, was expected to continue around September this year, and that the euro stabilization currency reserve arrangement and the cross-jurisdictional distribution model were the focus of market attention.