MiCA-compliant stablecoins to provide secure digital payments in Europe

Tether, Kraken, and Fabric Ventures are supporting Dutch fintech company Quantoz Payments in launching two stablecoins, EURQ and USDQ, compliant with the European Union’s Markets in Crypto-Assets Regulation (MiCA). Set to launch on 18 November, these euro- and dollar-backed stablecoins have been licensed by the Dutch Central Bank (DNB) as e-money tokens. Fully backed by fiat reserves, the stablecoins are designed to offer a regulated and secure payment option for the European Economic Area (EEA), aiming to reduce costs and improve the speed and transparency of transactions for both consumers and businesses.

The introduction of EURQ and USDQ is seen as a major step towards regulated digital finance in Europe, aligning with MiCA’s regulations, including a 1:1 fiat backing and an additional 2% reserve held by Quantoz. MiCA’s framework helps build trust in stablecoin issuers, ensuring transparency and mitigating risks in crypto payments. Kraken and Bitfinex are set to list the tokens on 21 November, giving access to eligible clients across Europe.

While the launch marks significant progress, Tether’s CEO, Paolo Ardoino, has raised concerns about the MiCA framework’s potential risks. He highlighted the regulation’s requirement for stablecoin issuers to hold at least 60% of their reserves in European banks, which could introduce vulnerabilities if banks experience financial instability due to high loan ratios. Despite these concerns, the stablecoins aim to enhance digital payment systems across Europe.

In related news, Norway’s central bank, Norges Bank, has endorsed the MiCA framework, evaluating its potential to support a central bank digital currency (CBDC). While the country is still considering additional regulations to ensure financial stability, it aligns closely with the EU’s MiCA rules, which could shape future developments in cross-border payments and CBDC implementation.