MiCA Stablecoin Rules: What They Mean and How Fideum Is Complying

Main Takeaways: New stablecoin rules imposed by the EU’s Markets in Crypto-Assets (MiCA) framework are set to take effect from June 30, 2024, significantly impacting the stablecoin and broader digital asset market within the European Economic Area (EEA). This document outlines Fideum’s strategy for aligning with these new regulations.

Fideum will limit the availability of Unauthorized Stablecoins for EEA users, implementing phased changes and product adjustments to ensure compliance and minimize market disruption.

Fideum’s approach is designed to seamlessly transition users from Unauthorized Stablecoins to Regulated Stablecoins over time, as more Regulated Stablecoins become accessible in the market.

 

Impact on You as a User:

From June 30, 2024, stablecoins will be regulated across the EEA, meaning only certain approved entities will be able to issue and publicly offer stablecoins, classified hereafter as “Regulated Stablecoins.”

Several existing stablecoins may not meet these criteria and will thus be categorized as “Unauthorized Stablecoins.”

Fideum will enact phased modifications to the availability of Unauthorized Stablecoins as detailed below. These measures aim to facilitate EEA users’ transition to Regulated Stablecoins while preventing market disruption and ensuring compliance with MiCA rules.

Starting June 30, 2024, Fideum will restrict the availability of Unauthorized Stablecoins for EEA users across its suite of products. Specifically:

• Fideum Convert: Conversion functions for Unauthorized Stablecoins will be available in “sell-only” mode. EEA users will be able to convert these to other cryptocurrencies (like BTC or Regulated Stablecoins).
• Trading: Spot trading pairs with Unauthorized Stablecoins will continue to be available until further notice.
• Wallet Services: Users will maintain the ability to withdraw or deposit their stablecoins in their Fideum wallets.

 

Understanding MiCA Stablecoin Regulations

As of June 30, 2024, MiCA mandates that certain stablecoin activities must only be conducted by electronic money institutions (EMIs) and credit institutions (banks).

This means within the EEA:

• Only EMIs and banks can issue/mint stablecoins.
• Only these institutions can promote the purchase of stablecoins.
• Only they can request trading platforms to list their stablecoins.

 

Fideum’s Compliance Strategy

Fideum is committed to full regulatory compliance while protecting users from potential market disruptions.

Effective from June 30, 2024, Fideum will:

• Implement general product restrictions preventing new engagements with Unauthorized Stablecoins across all Fideum products.
• Maintain “sell-only” Convert functions for Unauthorized Stablecoins, allowing users to transition to either other digital assets or Regulated Stablecoins.

 

Why Fideum’s Approach?

Fideum’s strategy is to ensure compliance with MiCA while preventing market instability. This transitional approach is designed to mitigate any adverse impacts on the EEA and global crypto markets, potentially caused by a rushed transition away from Unauthorized Stablecoins.

Given the current limited liquidity of Regulated Stablecoins, which may not suffice to handle abrupt shifts in demand, our gradual approach will allow the market to naturally adjust as more Regulated Stablecoins become available, ensuring the objectives of MiCA are fully realized.

As a leading exchange, Fideum prioritizes user protection and market stability, ensuring our actions support a smooth regulatory transition without creating undue market turbulence.