MiCA: A barrier to the adoption of cryptos?

The formalization of the MiCA law on cryptos is certainly one of the biggest regulatory developments in Europe this year. Although it sets a favorable legal framework for the emergence of cryptos, some experts believe that it could hinder their adoption.

Crypto adoption stemmed by MiCA transaction cap

The choice of the European Union (EU) to deploy regulations on cryptos pursued a goal. That of regulating their operation without blocking their expansion on the old continent.

However, this is, it seems, what is likely to happen with one of the provisions of the MiCA considered problematic. This is the rule that caps the daily trading volume of stablecoins at 200 million euros ($219 million). Assets, the most important of which are USDT and USDC.

This measure is considered inhibiting for the adoption of cryptos by Chander Agnihotri and Rachel Cropper-Mawer. According to these two legal experts, the stablecoin market could very quickly find itself facing a wall.

Because, they explain, the cap on the daily volume of transactions in stablecoins would affect the most important of them. The recourse and use of the latter could thus “quickly be smothered”. This perspective is certainly not in accordance with the spirit of the MiCA, the experts call for the revision of this provision.

Concretely, they want European lawmakers to review the daily limits of authorized stablecoin operations. Ideally, these should be substantially increased.

For the time being, we imagine that the intervention of such a modification will have to wait for the full entry into force of the MiCA. Cropper-Mawer believes that“Ultimately, the success of MiCA will largely depend on how it is applied at Member State level, and whether lawmakers keep revisiting it, especially considering the speed at which innovation happens in the crypto industry ».