Reputable figures in the XRP community believe that Ripple could be inclined to issue a Euro-based stablecoin amid MiCA regulatory restrictions.
This idea was first floated by Crypto Eri, a prominent community figure, in a recent post on X. According to Eri, the cryptocurrency market may see an increase in EUR stablecoins as the European Union’s Markets in Crypto-Assets (MiCA) regulation gains traction.
Notably, MiCA’s rules for stablecoin came into effect on June 30. To operate within the European Economic Area (EEA), stablecoin issuers must meet specific criteria outlined by MiCA. This regulatory framework categorizes stablecoins into e-money tokens and asset-referenced tokens.
One key aspect of the regulation is its cap on non-euro-based stablecoins, such as USD-pegged stablecoins like USDT. Specifically, MiCA imposes a limit of 1 million transactions per day or €200 million in daily trading volume for these stablecoins.
Ripple Likely to Issue EUR Stablecoin
The relatively low volume under this regulation has attracted significant attention among crypto market participants.
Some observers have suggested that the low volume limit may be a deliberate design choice to allow the market to start slowly with lower volumes, reducing risk.
On the other hand, Crypto Eri envisions that Ripple and other payment firms in the stablecoin market will likely issue a EUR stablecoin to beat the restriction.
🤨Watch for more EUR Stablecoins
I imagine Ripple & others will likely issue a EUR stablecoin because MiCA introduced a cap on stablecoins not tied to official EU currency (ie: USD pegged) when exchanged. Limits set at 1M transactions per day, and or EUR 200M trading vol per day.…— 🌸Crypto Eri 🪝Carpe Diem (@sentosumosaba) July 20, 2024
Recall that early this month, Circle, the second-largest stablecoin issuer, introduced the first MiCA-compliant Euro stablecoin “EURC” on the Base blockchain.
In response to Eri’s update, widely followed community figure “WrathofKahneman” expressed that the relatively low trading volume threshold outlined in the MiCA regulation appears to force large companies to create and use a EUR stablecoin.
“Makes sense Ripple would offer one,” he remarked. Additionally, WrathofKahneman pondered if this development could lead to increased demand for XRP Ledger capabilities.
EUR Stablecoin Benefits XRP Ledger
Meanwhile, Vet, an XRPL dUNL validator, expressed enthusiasm for the potential development. He suggested that the auto-bridge feature of XRPL would benefit from adding more assets, saying, “The more assets, the better.”
XRP Ledgers Autobridge feature will love it, the more assets the better
— Vet 🏴☠️ (@Vet_X0) July 20, 2024
Notably, Ripple is preparing to launch a USD stablecoin on XRPL this year. The company recently disclosed the ticker symbol as “RLUSD.”
However, XRPL enthusiast Jimbo has expressed disappointment that Ripple did not prioritize the launch of a EUR stablecoin, dubbed “RLEUR” instead.
According to Jimbo, Ripple missed an opportunity to gain market share from Tether amid the favorable regulatory environment in the EU. He believes Ripple’s focus on the U.S. market, where the regulatory landscape is less clear, is not so praiseworthy.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
