MiCA Takes Effect, Tether Exits Europe, Circle Captures Compliance Dividends

Asher

Odaily资深作者

@Asher_0210

2026-07-07 03:12

This article is about 2344 words, reading the full article takes about 4 minutes

USDC Rises in Europe, What’s OUSD Trying to Capitalize On?

AI Summary

Expand

Core Thesis: As the transition period for the EU's MiCA regulation ends, the trading access for non-compliant stablecoins (such as USDT) on European regulated exchanges has been restricted. Compliant stablecoin USDC has absorbed this demand, securing a more competitive position in the European market.
Key Elements:
1. After the MiCA transition period, the EU requires crypto asset service providers to support only compliant stablecoins; Tether did not apply for a MiCA license, with USDT voluntarily yielding the European stablecoin market.
2. Exchanges like Binance and Coinbase are removing trading pairs for non-compliant stablecoins like USDT for European users, retaining compliant options such as USDC and EURC, thus restricting USDT's trading access.
3. Open USD was launched with support from over 140 companies, offering free minting/redemption and a revenue-sharing model; however, some listed companies (e.g., Samsung, Upbit) have denied formal participation, sparking trust controversy.
4. Circle’s CEO responded to the competition, emphasizing that stablecoin competition hinges on network effects; with nearly a decade of accumulated global liquidity, regulatory licenses, and payment infrastructure, USDC has built a moat.
5. In the compliant European trading landscape, USDC has shifted from an “alternative option” to a core stablecoin, becoming the preferred on-chain dollar asset for institutional capital and exchanges due to its compliant status.

Original by Odaily (@OdailyChina)

Author: Asher (@Asher_0210)

Starting this month, USDC has enjoyed a moment of triumph in the European crypto market.

With the end of the MiCA transitional period, unauthorized crypto asset service providers can no longer operate within the EU. For crypto exchanges wishing to remain in the European market, compliance is not just about the platform itself; the supported assets and trading pairs also need adjustment, with stablecoins being the first affected.

Previously, the default answer for dollar-pegged stablecoins was often USDT. However, Tether has not applied for a MiCA license. Tether CEO Paolo Ardoino explained why USDT did not seek EU MiCA authorization, stating that the regulation is "very dangerous for stablecoins." This effectively means USDT has voluntarily ceded the European stablecoin market.

But the demand for dollar-pegged stablecoins in Europe will not disappear. Users need dollar stablecoins, platforms need dollar trading pairs, and institutional capital requires on-chain dollar assets with clearer compliance pathways. The demand that was previously largely met by USDT is now shifting towards compliant stablecoins.

Well before the end of the MiCA transition period, Circle had already secured an EMI license in France and integrated USDC and EURC within the MiCA framework. For Circle, this represents a prime opportunity for USDC to ascend in Europe.

USDT Trading Access Shrinks, USDC Caters to European Demand

Crypto exchanges are acting more decisively than regulatory documents suggest.

Take Binance, for example. It has already delisted trading pairs for non-MiCA compliant stablecoins like USDT, FDUSD, TUSD, and DAI for users in the European Economic Area, while retaining USDC, EURI, and euro trading pairs. Coinbase has also indicated it will restrict services for stablecoins not complying with MiCA, offering European Economic Area users the option to switch to compliant stablecoins such as USDC and EURC.

These adjustments do not mean USDT is completely banned in Europe. Users can still hold USDT on-chain and use it in some scenarios, but the trading entry points for USDT on compliant exchanges are indeed being squeezed.

Previously, USDT's advantage stemmed from a virtuous cycle of scale effects – more trading pairs led to greater user familiarity; greater user familiarity made exchanges more dependent on it. Post-MiCA, this cycle has been broken in Europe. For exchanges, the prerequisite for continuing to serve EU users is minimizing compliance risks. Therefore, when selecting stablecoin trading pairs, they will prioritize assets with clearer compliance pathways.

Open USD Arrives with Force, but USDC's Moat Remains

On June 30th, Open Standard officially launched a new dollar-pegged stablecoin, Open USD, backed by over 140 companies including Visa, Stripe, Mastercard, BlackRock, and Coinbase. Open USD offers free minting and redemption, and plans to distribute reserve yields to partners after deducting management fees. Upon this news, Circle's stock price plummeted, dropping over 16% during the trading session.

The market's concern is understandable. Open USD's lineup appears formidable, and its model seems directly aimed at USDC. On one hand, it boasts the backing of payment giants, trading platforms, and asset managers; on the other, it features a revenue-sharing mechanism. If this model proves successful, it could indeed poach a portion of the stablecoin market share that originally belonged to USDC.

However, this list of "140+ partners" was soon met with skepticism.

Shortly after Open Standard's announcement, several Korean companies listed as partners clarified that they were not formally involved in the Open USD project. According to reports, Samsung Electronics stated that no formal discussions regarding the OUSD project had taken place; Dunamu mentioned only reviewing related proposals; Upbit went further, explicitly denying participation in the OUSD issuance; K Bank also denied having any formal agreement.

See details in 《OUSD's '100+ Person List' Just a 'Letter of Intent'? Borrowing Names for Marketing Triggers Trust Crisis》.

Stablecoins are not a business that can succeed simply by displaying partner logos. Issuance, redemption, market making, exchange depth, on-chain liquidity, and payment scenarios all require long-term development and refinement. A glamorous list of partners doesn't automatically guarantee capital migration, let alone convince users to abandon USDC immediately. Circle's stock drop following the Open USD competitive news was likely an overreaction to market concerns about competition.

Furthermore, Circle CEO Jeremy Allaire directly addressed the OUSD competition, stating that the ultimate battle for stablecoins comes down to network effects. USDC's nearly decade-long accumulation of application integrations, global liquidity, regulatory licenses, banking relationships, and payment infrastructure represents Circle's true moat. He also questioned consortium-style stablecoins like OUSD. While multi-party alliances may appear powerful, more participants often lead to slower decision-making and misaligned incentives. Free minting, free redemption, and revenue sharing sound attractive, but stablecoin infrastructure requires continuous investment. Lack of sustainable profitability could hinder long-term network development. (Read more: Circle CEO Responds to OUSD Challenge: Stablecoins Are a 'Winner-Takes-All' Game, Alliance Model Doomed to Fail)

Open USD has indeed put pressure on Circle, but it's far from reshaping the stablecoin market landscape. It feels more like a high-profile competitive announcement. To truly challenge USDC, it must first prove its ability to generate liquidity, find use cases, and demonstrate long-term execution capability.

In the European Arena, Circle Holds a Stronger Position

USDT remains one of the world's most dominant stablecoins, and Open USD will continue to fuel new market narratives. Stablecoin competition won't end with MiCA's implementation; it will likely intensify.

However, the European market has already sent a clear signal. Stablecoins that aim to persist long-term in mainstream trading and institutional scenarios cannot rely solely on liquidity and user habits; they need a sufficiently clear compliance identity.

This is precisely Circle's opportunity. USDC may not immediately replace USDT, but its position within European compliant trading scenarios is becoming increasingly important. As exchanges, payment institutions, and institutional capital gradually shift towards more compliant on-chain dollar assets, Circle has the chance to transform USDC from a "substitute option" into one of the core stablecoins within the European market.