The role of stablecoins in the European payments market under MiCA regulation
The role of stablecoins in the European payments market under MiCA regulation

Summary/Abstract: Motivation: MiCA marks a pivotal regulatory shift for the fast-evolving digital asset and payments landscape, warranting a rigorous assessment of its consequences for both stablecoin issuers and users. The existing literature primarily concentrates on the investment attributes of cryptoassets, leaving the payment functionality of cryptocurrencies under-examined. This study addresses these gaps by highlighting the payment role of stablecoins and examining the regulatory impacts on their issuance and use.Aim: The goal of the work is to determine the role of stablecoins in the European payment services market under the MiCA regulatory regime, considering their economic functions and legal classification.Results: The study found that the issuance of EMT does not result in the creation of a payment system under EU law. Instead, electronic money tokens under MiCA are classified as funds. There is a substantial similarity between EMT and electronic money under EMD2. At the same time, EMT differs from classical electronic money in that it utilizes a decentralized blockchain infrastructure; therefore, EMTs are both e-money and crypto-assets. A comparison of the regulations governing stablecoins in five jurisdictions – the EU, the US, Japan, Switzerland, and the UK – revealed that, generally, new regulations do not replace earlier ones, but rather extend their logic to a new type of funds and decentralized blockchain technology. Nevertheless, detailed regulations differ significantly in particular aspects. Due to the short duration of the MiCA regulation, the general effects on the innovativeness of the European digital payment services market have not yet been revealed.

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