Thanks for the article, but it doesn't address 3 major points:
- Why is Tether not affected by MiCA? They've just decided to give up on the European market?
- MiCA and the proposed new US rules seem to contradict each other. How will Circle do it?
- How is it technically possible to impose KYC on the creation of a new USDC or USDT wallet? And if it becomes possible, won't this create so much friction that it will give decentralized algorithmic stablecoins a huge advantage?
Thanks for your thoughtful response! Good points too.....
- I might have had to make it more clear. And sometimes, it is a bit of a vague area for me because the implications of the legislation are ongoing and somewhat fluid. While Tether does not market to Europe, ongoing delistings indicate they aren't MiCA compliant in their current form and probably won't be in a few months (hence Kraken's decision to delist too by March 31st). They have leverage in many other ways (global market and almost biggest short-term maturity bonds buyer US = 13 billion in profits over 2024) and probably don't need Europe in their opinion (dirham pegged stabled coin, moving entities to El Salvador, being a Bitcoin focused company more than anything else and so forth)
- The new US rules are "new," perhaps more of an intent than anything else. Only time will tell what moves will be made by the current administration. Hopefully, the presence of Howard Lutnick in Trump's admin will allow for some lobbying (in Tether's favor). At the same time, a full and crystal-clear audit would be commendable. As for Circle, even though they have more corporate and US-endorsed credibility, I think MiCA might backfire against them depending on how the current administration feels about them swapping bills for uninsured European bank deposits. I think Jeremey Allaire is sweating more than Paolo Ardoino is, but I guess I should ask them :)
- As for your last point, I am not sure how it is technically possible to implement KYC. But let's assume they find a way. If you can't operate a wallet (or CEX) without KYC, that already answers your question. I guess they will need to adopt the 7 flag strategy :).....Lastly, you are right; decentralized algorithmic stablecoins will become an advantage, but assuming everything in this space is based on trust, how will the deployers prove that they are over-collateralized, and who will be (providing) banking these entities?
Thanks for the article, but it doesn't address 3 major points:
- Why is Tether not affected by MiCA? They've just decided to give up on the European market?
- MiCA and the proposed new US rules seem to contradict each other. How will Circle do it?
- How is it technically possible to impose KYC on the creation of a new USDC or USDT wallet? And if it becomes possible, won't this create so much friction that it will give decentralized algorithmic stablecoins a huge advantage?
Thanks for your thoughtful response! Good points too.....
- I might have had to make it more clear. And sometimes, it is a bit of a vague area for me because the implications of the legislation are ongoing and somewhat fluid. While Tether does not market to Europe, ongoing delistings indicate they aren't MiCA compliant in their current form and probably won't be in a few months (hence Kraken's decision to delist too by March 31st). They have leverage in many other ways (global market and almost biggest short-term maturity bonds buyer US = 13 billion in profits over 2024) and probably don't need Europe in their opinion (dirham pegged stabled coin, moving entities to El Salvador, being a Bitcoin focused company more than anything else and so forth)
- The new US rules are "new," perhaps more of an intent than anything else. Only time will tell what moves will be made by the current administration. Hopefully, the presence of Howard Lutnick in Trump's admin will allow for some lobbying (in Tether's favor). At the same time, a full and crystal-clear audit would be commendable. As for Circle, even though they have more corporate and US-endorsed credibility, I think MiCA might backfire against them depending on how the current administration feels about them swapping bills for uninsured European bank deposits. I think Jeremey Allaire is sweating more than Paolo Ardoino is, but I guess I should ask them :)
- As for your last point, I am not sure how it is technically possible to implement KYC. But let's assume they find a way. If you can't operate a wallet (or CEX) without KYC, that already answers your question. I guess they will need to adopt the 7 flag strategy :).....Lastly, you are right; decentralized algorithmic stablecoins will become an advantage, but assuming everything in this space is based on trust, how will the deployers prove that they are over-collateralized, and who will be (providing) banking these entities?