Globally, the debate continues on the possible complete acceptance of cryptocurrency as part of conventional everyday transactions. Could this change the way crypto regulations work?
While this conversation remains ongoing, Europe is leading. At least, banks in the region are providing crypto-friendly solutions.
MiCA: A Crypto Regulation Blueprint for Growth
In a post on X, Patrick Hansen, Circle’s Policy Head, explained that Europe has taken the lead in this sector.
Hansen believes 2025 could signal a shift for European crypto firms to flourish. He said progressive regulatory frameworks like Markets in Crypto Assets (MiCA) regulation have helped support the recorded gains.
Notably, Hansen emphasized that despite the strong perception of strict regulatory hurdles sparked by MiCA, Europe still has the highest number of banks supporting crypto businesses.
As of the last count, there are 55 crypto-friendly banks in Europe. For clarification, MiCA targets ensuring that crypto-regulated firms have a supportive environment in which to thrive.
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The regulatory framework seeks to guarantee better access to critical banking services and seamless operations for them.
Interestingly, in 2025, non-bank payment companies, including issuers of stablecoin in Europe, will have this level of permission unlocked for them.
These service providers could apply for direct access to Central Bank payment systems such as the Single Euro Payment Area (SEPA).
A significant aspect of this development is allowing such companies to operate without interfacing with traditional banks. The resultant benefit is that it reduces costs and increases their efficiency.
In contrast to the U.S., Hansen notes that Europe is proving more supportive of crypto businesses.
According to Hansen, “Operation Chokepoint 2.0” in the U.S is a major hurdle for crypto firms seeking banking services. He insists that Europe’s regulatory rules have encouraged competition in payment systems and placed it ahead of others.
Challenges and Compliance Lessons from Tether and Coinbase
Despite the points highlighted by Hansen, recent events make it difficult for many to come to terms with his exposition.
Notably, Tether recently pulled out of Euro Tether (EURT) operations following the regulatory challenges it encountered in Europe.
Tether refused to comply with the MiCA regulations, which sought to guarantee greater transparency and security in the crypto market.
Tether’s decision raised concerns among stakeholders, particularly as Coinbase complied by delisting noncompliant stablecoins from its platform. This compliance move has allowed for the continued operation of Coinbase in the region.
Many users have wondered what action Tether would take should the incoming administration of President-elect Donald Trump implement regulatory reforms similar to Europe’s guidelines. The implication could have adverse effects on the broader cryptocurrency market.
Strengthening Innovation and Consumer Protection
Interestingly, complying with the MiCA regulations has significant benefits. As noted by Hansen, these crypto-compliant businesses will operate freely.
Additionally, they receive support from banking services, which boosts growth as investors’ confidence is assured. However, virtual asset providers would need to take responsibility for transactions on their platform.
Besides, the guidelines offer authorities more leverage to track and identify illicit crypto transactions. These include those associated with terrorism financing, darknet activities, and child abuse, among others.
A U.S. lawmaker, Senator Elizabeth Warren, supported stablecoin legislation to curb illicit funding using the asset.
Overall, the MiCA regulations also promote consumer protection while allowing for market innovation and growth.
Notably, the stablecoins will be well collateralized to ensure that their value does not disappear into nothing, leaving users with financial loss.
