MiCA — Regulation (EU) 2023/1114, the Markets in Crypto-Assets Regulation — is the European Union's overarching legal framework for crypto-assets. For stablecoins, it is the first regulation anywhere to impose issuer authorization requirements, mandatory reserve backing, and transaction limits in a single harmonized law covering all 27 EU member states.
The stablecoin-specific rules (Titles III and IV) took effect on 30 June 2024. The full regulation, including licensing for crypto-asset service providers (CASPs), applied from 30 December 2024. A transitional period for incumbent CASPs that had operated lawfully before that date runs until 1 July 2026 in member states that chose to apply it.
Two categories of stablecoin
MiCA draws a hard line between two types:
E-money tokens (EMTs) maintain a stable value by referencing a single official currency — for example, one US dollar or one euro. USDC, USDT, and PayPal's PYUSD are EMTs under MiCA's definition. The legal analogy is to electronic money under the EU's existing E-Money Directive, and the authorization process follows a similar path.
Asset-referenced tokens (ARTs) reference any other value or right — including multiple currencies, commodities, or a basket of assets. The now-defunct Meta Libra/Diem project would have been an ART. Facebook's withdrawal under regulatory pressure was, in part, a preview of MiCA's approach to systemic ARTs.
Most stablecoins in circulation today are EMTs. The practical rules differ in important ways:
| Dimension | EMT | ART |
|---|---|---|
| Authorised by | National competent authority (e.g., ACPR, BaFin) | National competent authority |
| EBA role | Supervises significant EMTs | Supervises all significant ARTs |
| Reserve requirement | At least 30% in a segregated credit institution account; remainder in low-risk, highly liquid instruments | Diversified, high-quality reserve assets with established monitoring |
| Issuer type required | Must be authorized as an electronic money institution or credit institution | Credit institutions or specifically authorized ART issuers |
Authorization and the EU passport
To issue an EMT in the EU, the issuer must be licensed as an electronic money institution (EMI) or a credit institution in at least one EU member state. Authorization in one state carries an EU passport: the issuer may then offer the token across all 27 member states without further national authorization.
Circle — issuer of USDC and EURC — obtained EMI authorization from France's Autorité de Contrôle Prudentiel et de Résolution (ACPR) in July 2024, becoming the first global stablecoin issuer to obtain MiCA authorization. USDC is issued in the EU by Circle Mint Europe SAS under that license.
Tether, issuer of USDT, has not sought MiCA authorization. As a result:
- Since 31 March 2025, MiCA-regulated exchanges are prohibited from offering unauthorized EMTs for public trading in the EEA.
- Major EU exchanges — Coinbase Europe, Binance, Kraken, and Crypto.com — delisted USDT spot pairs for EEA users between December 2024 and March 2025.
- ESMA clarified in January 2025 that custody and peer-to-peer transfer of already-held unauthorized stablecoins does not constitute "offering to the public" and remains permitted.
Reserve requirements in detail
For EMTs, issuers must hold reserves equal to 100% of outstanding tokens. The key requirements are:
- At least 30% of funds in a segregated credit institution account — not comingled with issuer assets
- The remainder invested in secure, low-risk, highly liquid instruments with minimal market and credit risk (such as short-term government bonds)
- Assets must be held in custody by an authorized credit institution or investment firm
- Reserves are bankruptcy-remote: they cannot be seized by issuer creditors
Significant stablecoin rules
MiCA imposes additional obligations on stablecoins deemed significant by the EBA — those that breach at least three of seven criteria including number of holders, market capitalization, transaction volume, number of interconnected service providers, or cross-border reach.
The key operational constraint for significant EMTs: a cap on daily transaction volume of €200 million. Issuers that approach this threshold must implement measures to reduce usage if needed. This provision was specifically designed to address systemic stablecoins that could threaten monetary sovereignty or financial stability.
The EBA has supervisory authority over all significant ARTs and significant EMTs. For non-significant tokens, national competent authorities are the primary supervisors.
CASP licensing
MiCA also governs crypto-asset service providers (CASPs) — exchanges, custodians, brokers, and other intermediaries. From 30 December 2024, operating as a CASP in the EU without authorization became a regulatory violation.
CASPs must be licensed by their home-state national competent authority. A single license grants the right to provide services across the EU. Obligations include:
- Capital requirements (varying by service type, from €50,000 to €150,000)
- Governance and fit-and-proper requirements for management
- Client asset segregation
- AML/CFT compliance under the EU's AMLD framework
- Market-abuse monitoring and reporting
Incumbent CASPs that were operating lawfully before 30 December 2024 benefit from a transitional grandfather period until 1 July 2026 (or until authorization is granted or refused) in member states that chose to apply the transitional regime.
What MiCA does not cover
MiCA explicitly excludes:
- Central bank digital currencies (CBDCs) issued by EU central banks
- Truly unique, non-fungible tokens (NFTs with no fractionalization or interchangeability)
- Security tokens that fall under existing financial instruments law (MiFID II)
- Stablecoins used only within a limited network (loyalty points, gift cards)
The bottom line
MiCA gives the EU a coherent, harmonized stablecoin framework where before there were 27 different national approaches. Its practical effect through mid-2026 has been to concentrate euro-denominated stablecoin issuance among a small group of MiCA-authorized issuers — led by Circle — and to push USDT off the trading books of regulated EU exchanges. For businesses operating in the EU, the compliance question is no longer theoretical: unauthorized stablecoins carry real exchange access risk, and the authorized list, while still short, is growing. For a detailed look at what USDT's status means for businesses, see How MiCA affects USDT in Europe.