- German financial behemoth Deutsche Börse and stablecoin giant Circle partnered to expand the reach of the USDC and EURC.
- Circle’s EU market penetration gives it a significant advantage over Tether.
Deutsche Börse Group and Circle Internet Group recently partnered to boost stablecoin adoption in the European Union (EU) market. The parties announced on Tuesday that they had signed a Memorandum of Understanding (MoU) to solidify their collaboration.
MoU Between Deutsche Börse and Circle
According to Circle’s press release, the partnership “marks a milestone for regulated digital finance in Europe.” The first-of-its-kind agreement will allow the German multinational corporation to deploy the giant digital asset issuer’s euro-based EURC and US dollar-based USDC stablecoins across the EU jurisdiction.
Circle touted that it’s the first global issuer to gain approval in the EU under the Markets in Crypto Assets Regulation (MiCAR). Additionally, it highlighted that the achievement underscores its commitment to regulatory compliance and support for the European region’s advancement in digital financial innovation.
MiCAR is a harmonized framework designed to govern crypto asset conduct in the EU. In July last year, Circle secured authorization from the same regime to roll out its stablecoin offerings in the union.
Jeremy Allaire, Co-Founder, Chairman, and CEO of Circle, claimed that the EU is an essential location from a strategic standpoint because it’s one of the world’s largest economies. He said the new partnership will offer customers access to regulated stablecoins designed to reduce settlement risks, lower transaction costs, and improve financial efficiency.
The parties initially plan to focus their efforts on enabling the listing and trading of stablecoins on the 360T-powered 3DX platform. Crypto Finance will provide institutional support to the system. It should be noted that the two companies operate under the umbrella of Deutsche Börse Group.
Moreover, Clearstream, Deutsche Börse Group’s post-trade business arm, will offer institutional-grade custody to the venture. Meanwhile, the German wing of Crypto Finance will serve as its sub-custodian.
Stephanie Eckermann, the point-person of Deutsche Börse in Post-Trading, echoed Allaire’s statements, emphasizing their potential to enhance the competitiveness of the European capital markets.
Circle’s European Advantage Over Tether
The move gives Circle a considerable advantage over the biggest stablecoin issuer, Tether. European Economic Area (EEA)-regulated exchanges notably delisted its competitor’s products, including the USDT and EURT, due to their failure to comply with the MiCAR regime.
MiCAR requires stablecoin issuers to maintain full reserves to back their products. Furthermore, it requires them to undergo regular audits. Tether’s failure to adhere to the abovementioned standards led to its departure from EU jurisdiction. Nonetheless, the company maintains business interests in the area due to its investments in various companies, including Spain-registered digital asset solutions provider Bit2Me and Malta-registered stablecoin issuer StablR.
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