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Next Generation has formed a partnership with Ireland’s electronic money institution Decta to lead the introduction of a stablecoin linked to the Euro, designated as EURT.
In a recent blog entry, Decta announced that the two companies have collaborated to launch the EURT stablecoin, which will adhere fully to the Markets in Crypto-Assets Regulation (MiCA) standards.
The stablecoin will be deployed on the Stellar blockchain and will also be compatible with three additional platforms.
Next Generation’s EURT to Conduct Regular Reserve Audits
Decta indicated that EURT will maintain transparency by having its reserves audited by a prominent international auditing firm.
Additionally, the company seeks to secure broad support for EURT by establishing strategic partnerships with esteemed financial institutions, thus creating new options for depositing and withdrawing funds.
“The introduction of MiCAR marks a significant milestone in the advancement of contemporary digital finance in Europe. Given the current underrepresentation of European coins, we expect a swift increase in their visibility,” stated Suren Hayriyan, President of Next Generation.
Next Generation and Decta collaborate on euro stablecoin project https://t.co/AzM6yeK2Sb
— Finextra (@Finextra) August 5, 2024
Hayriyan estimated that the market capitalization for EURT could reach as much as $4 billion by 2026, highlighting the growth potential within the stablecoin market.
While the total market capitalization for global stablecoins exceeds $160 billion, Euro-pegged stablecoins represent only a small portion at $280 million.
Looking ahead, Next Generation anticipates that the market capitalization of Euro-backed stablecoins will rise to $15 billion in 2025, $70 billion in 2026, and exceed an impressive $2.5 trillion by 2029.
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“I do not expect, of course, that we will soon see parity in the positions of American and European coins in the near future,” Hayriyan remarked.
“But I have no doubt that there will be a rapid growth to the proportions in which these fiat currencies are now.”
MiCA Framework Related to Stablecoins Takes Effect
In June, the MiCA regulatory framework concerning stablecoins came into effect.
According to the new regulations, companies must cease issuing non-euro-denominated stablecoins utilized as a “means of exchange” if they exceed a threshold of more than 1 million transactions or a value exceeding 200 million euros (US$215.2 million) per day.
In accordance with these regulations, stablecoin issuer Circle has registered as an electronic money institution (EMI) in France, providing the company with a vital license to operate as a compliant stablecoin issuer under the EU’s new cryptocurrency laws.
It is important to note that the implementation of the MiCA regulatory framework, which was initially approved in 2022, has posed challenges for blockchain companies and decentralized finance (DeFi) protocols.
DeFi protocols must either achieve full decentralization or comply with the Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations specified in the MiCA framework.
While fully decentralized networks are exempt from reporting requirements under MiCA, protocols that utilize foundations and intermediaries to support decentralized communities may find it difficult to meet MiCA’s standards for adequate decentralization.
As a result, these DeFi protocols must decide between attaining complete decentralization or accepting the requirement for users to provide verification data.
Recently, Italy has implemented measures to enhance its regulation of cryptocurrency markets in alignment with the MiCA regulatory framework.
The post Next Generation Partners with Decta to Launch Euro-Pegged Stablecoin EURT appeared first on Cryptonews.
