Europe's MiCA law hurts euro stablecoin competitiveness, report says

The European Union's Markets in Crypto-Assets (MiCA) regulation has made euro-based stablecoins safer but has diminished their competitiveness, according to a recent report by Blockchain for Europe. The report, cited by CoinTelegraph, notes that euro-denominated tokens account for less than 1% of global stablecoin trading volume. It suggests this indicates the market has entered the downward slope of a "regulatory Laffer curve," where stricter rules lead to reduced activity. The analysis identifies a ban on interest and stringent reserve requirements as key problems, recommending improvements to interest and transparency rules and an overhaul of the reserve mandates. CoinTelegraph added that while potential MiCA reforms are being discussed, the European Central Bank and the European Banking Authority (EBA) remain cautious due to financial stability concerns, suggesting any deregulation will take time.