Ripple Poised to Launch EUR Stablecoin in Response to EU MiCA

• Ripple Labs is reportedly considering launching a stablecoin to comply with MiCA rules.
• Despite these speculations, Ripple is yet to launch its USD-backed stablecoin as planned.

There are ongoing speculations in the crypto and XRP community that Ripple Labs Inc. is on the verge of launching a EUR-backed stablecoin soon. Their expectations are based on the recently established Markets in Crypto-Assets’ (MiCA) rules for stablecoin, which came into effect on June 30.

Ripple on Track to Launch a EUR Stablecoin

The idea of Ripple floating a EUR stablecoin was first suggested by popular XRP community member, Crypto Eri, in a post on X. 

“I imagine Ripple & others will likely issue a EUR stablecoin because MiCA introduced a cap on stablecoins not tied to official EU currency (ie: USD pegged) when exchanged,” Crypto Eri wrote.

🤨Watch for more EUR Stablecoins
I imagine Ripple & others will likely issue a EUR stablecoin because MiCA introduced a cap on stablecoins not tied to official EU currency (ie: USD pegged) when exchanged. Limits set at 1M transactions per day, and or EUR 200M trading vol per day.…

— 🌸Crypto Eri 🪝Carpe Diem (@sentosumosaba) July 20, 2024

Stablecoin issuers interested in operating within the European Economic Area (EEA) must meet specific criteria outlined by MiCA. This regulatory framework functionally categorizes stablecoins into E-Money Tokens (EMTs) and Asset-Referenced Tokens (ARTs). EMTs include stablecoins, such as USDT from Tether and USDC from Circle, backed by a single official currency.

ARTs, on the other hand, derive their value by referencing another value, a right, or a combination of multiple values, such as fiat currencies, commodities, and other cryptocurrencies. Some notable examples in this category are Tether’s XAUt and PAXG.

The newly introduced MiCA rules impose limits on stablecoins that are not tied to an official EU currency when used as a means of exchange. The daily limits are one million transactions and £200 million in trading volume for these stablecoins. 

The crypto market now faces considerable adjustments with the limitations set by the MiCA rules. As we discussed earlier, the liquidity of existing USD stablecoins is expected to decrease, allowing EU-regulated EUR and USD stablecoins to gain market share. Crypto market observers opined that the imposed limits were deliberately designed to reduce risk as market volume becomes slower.

However, Crypto Eri sees a possibility of Ripple and other payment firms issuing a EUR stablecoin to beat the MiCA restriction. As mentioned in our earlier report, Circle, the issuer of the USDC stablecoin, launched the first MiCA-compliant Euro stablecoin “EURC” on the Base blockchain. For now, USDC and EURC are the only stablecoins from a top stablecoin issuer that has complied with the new MiCA regulation. 

While speaking in a recent interview, Gijs op de Weegh, CEO and Founder of Stablr said MiCA has the potential to become a blueprint for the global crypto industry.

Expectations for Ripple’s Potential EUR Stablecoin Launch

Responding to Crypto Eri’s post, Vet, an XRPL dUNL validator, expressed excitement for the potential development. 

“XRP Ledgers Autobridge feature will love it, the more assets the better,” Vet emphasized. 

Similarly, popular XRP community figure WrathofKahneman said it would be reasonable if Ripple launched an EUR stablecoin. He went on to question whether the launch could lead to an increase in demand for XRP and XRPL.

Notably, Ripple noted in our earlier report that it plans to launch a USD stablecoin this year. The firm’s CTO, David Schwartz gave more hints during XRP’s Las Vegas conference.