The caps placed on stablecoins in the Markets in Crypto Assets Regulation (MiCA) legislation that is now being considered by the European Parliament are reportedly no sure thing.
These caps — which have been a controversial part of the MiCA legislation as the final vote upon it nears — could go up or down, CoinDesk reported Tuesday (Oct. 25), citing comments from European Union (EU) lawmakers and officials.
As the MiCA legislation stands now, the size of crypto assets linked to assets other than EU currencies is constrained by a “tough limit,” but that threshold may be revised as some members of the crypto industry say it could limit the market and some EU officials say it could be too strict and may need to evolve, according to the report.
The goal of the provisions limiting stablecoins is to protect and encourage the use of euro-denominated stablecoins, rather than the dollar-denominated coins that currently dominate the market. At a specified level, they would have to stop issuing tokens and take unspecified steps to reduce their use.
Read more: A Primer on EU Stablecoin Regulations
As PYMNTS reported Oct. 6, the final text of MiCA has been passed by the European Commission and is now before the European Parliament.
Capping the use of non-euro-denominated stablecoins is one of the key provisions of the documents but the European Parliament is not bound by the existing draft of the legislation.
While MiCA has a number of controversial sections that are broadly opposed by the crypto industry — including limiting stablecoin transactions — it remains “a momentous development for the cryptocurrency space,” Anto Paroian, CEO and executive director of crypto hedge fund ARK36, told PYMNTS at the time in an email.
Read more: Final Draft of EU Crypto Law Caps Stablecoin Transactions
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