Circle obtains French banking approval under MiCA framework while BitGo pursues German license, contrasting with delayed US STABLE Act legislation amid industry resistance and post-hack security upgrades.
France’s ACPR granted Circle in-principle banking authorization on 18 June 2024, positioning the USDC issuer as first-mover for MiCA compliance, while BitGo’s simultaneous German license filing reveals strategic EU market plays as US lawmakers delay critical stablecoin legislation.
EU Emerges as Crypto Banking Hub Under MiCA Framework
Circle’s conditional approval from France’s Prudential Supervision and Resolution Authority (ACPR) marks the first major crypto firm to clear MiCA’s stringent capital requirements. The authorization requires maintaining 100% reserves for USDC stablecoins – mirroring MiCA’s liquidity rules set for full implementation in July 2024. ECB data shows only 22% of EU crypto entities currently meet these standards.
US Regulatory Uncertainty Intensifies
The STABLE Act’s markup postponement on 19 June 2024 follows Coinbase CEO Brian Armstrong’s testimony warning about “strangling dollar-pegged innovation.” House Financial Services Committee records reveal 83% of submitted comments opposed the bill’s bank charter requirements for stablecoin issuers. A16z managing partner Kathryn Haun noted: “This creates perverse incentives for operators to prioritize EU markets.”
Custody Arms Race Accelerates Post-Bybit Breach
BitGo’s partnership with Chainalysis deploys machine learning algorithms to screen 1.2 million daily crypto wallet transactions, responding to CipherTrace’s reported 58% year-over-year increase in DeFi exploits. The collaboration follows BitGo’s custody assets under management surpassing $1.75 billion in Q2 2024, per company filings.
Historical Precedent: From Travel Rule to MiCA
The current regulatory push mirrors 2020s FATF Travel Rule implementation, when 44% of crypto firms initially failed compliance checks. Similarly, MiCA’s reserve requirements echo 2019 New York DFS cryptocurrency custody rules that forced 17 providers to exit the market. ECB analysts suggest MiCA could reduce EU crypto service providers by 35% through 2025.
Stablecoin Wars Enter New Phase
Circle’s EU foothold contrasts with Tether’s recent pivot to emerging markets, while Binance USD market share dropped to 6% in June 2024 from 38% pre-2023 SEC lawsuit. Federal Reserve payment study data shows USDC now facilitates 41% of institutional crypto settlements versus 29% for banking rails.
