The US financial regulators have placed one of the largest dollar stablecoins under scrutiny, with the New York Department of Financial Services ordering Paxos Trust Co. to halt the creation of its BUSD stablecoin. This development comes amid a regulatory crackdown on crypto companies that have witnessed increased enforcement actions this year. As a result of the current ambiguity surrounding US regulations, stablecoin issuers within the area may encounter legal and regulatory obstacles in the near future, which is an unfortunate turn of events given the enormous value, transactions, and activity USD stablecoins represent in the global cryptocurrency landscape.
On the other hand, the EU’s regulatory landscape concerning stablecoins is much clearer. Currently, EU-based stablecoin operators are regulated by the European Anti-Money Laundering Directive 5 (AMLD5), which is implemented into member states’ national legislation. However, e-money stablecoins, such as EUROe, are regulated under the European E-Money Directive and Payment Services Directive 2 (PSD2). These clear regulatory guidelines ensure that electronic money stablecoins, such as EUROe, are not operating in the grey areas, and their users can be sure of the legal framework under which such stablecoins are regulated.
Furthermore, the EU is set to introduce new crypto-asset legislation with the introduction of Markets in Crypto-Assets Regulation (MiCA) in circa 2024. MiCA sets forth new requirements for capital controls and further consolidates the standing of compliant stablecoins in the EU.
In conclusion, EU-regulated stablecoins are subject to well-known and established statutes with clear pathways for future development. While US-based stablecoins may be subject to unknown developments in the short term, stablecoins regulated under EU legislation will not be adversely affected. EUROe is regulated as electronic money in the EU and will remain so in the foreseeable future. MiCA will impose additional requirements on Membrane Finance but will not negatively impact EUROe's users or customers.