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  <p class="is-style-lead">As a proactive measure in anticipation of mandatory regulations due to be enforced in 2024, the European Union’s banking overseer has prompted <a href="https://crypto.news/eu-raises-alarm-over-potential-bank-threats-posed-by-stablecoins/" rel="noopener noreferrer nofollow">stablecoin</a> issuers&nbsp;to voluntarily adhere to “guiding principles” concerning risk management and consumer protection.</p> 
  <p>On July 12, the European Banking Authority (EBA)<a href="https://www.eba.europa.eu/eba-encourages-timely-preparatory-steps-towards-application-micar-asset-referenced-and-electronic" target="_blank" rel="noopener noreferrer nofollow">&nbsp;unveiled</a>&nbsp;its maiden collection of measures designed for public evaluation, aiming to demystify the Markets in Crypto-Assets regulation (<a href="https://crypto.news/eu-finance-ministers-green-light-mica-crypto-regulation/" rel="noopener noreferrer nofollow">MiCA</a>) prerequisites for launching a stablecoin which is slated to come into effect on June 30, 2024. </p> 
  <p>Key points within these measures encompass enduring redemption rights and complaint-handling guidelines.</p> 
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     <p lang="en" dir="ltr">European <a href="https://twitter.com/hashtag/Banking?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">#Banking</a> Authority encourages timely preparatory steps towards the application of <a href="https://twitter.com/hashtag/MiCAR?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">#MiCAR</a> to asset-referenced and electronic money tokens &nbsp; | European Banking Authority <a href="https://t.co/ZyN3fCK8DD" target="_blank" rel="noopener noreferrer nofollow">https://t.co/ZyN3fCK8DD</a> <a href="https://twitter.com/hashtag/stablecoins?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">#stablecoins</a> <a href="https://twitter.com/hashtag/cryptoassets?src=hash&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">#cryptoassets</a></p>— Mehmet Kerse (@m_kerse) <a href="https://twitter.com/m_kerse/status/1679135685440163841?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">July 12, 2023</a> 
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  <p>In May, the Economic and Financial Affairs Council of the European Union greenlit MiCA, marking the globe’s initial comprehensive rule set for trading crypto assets such as bitcoin (<a target="_blank" href="https://crypto.news/price/bitcoin/" rel="noopener noreferrer nofollow">BTC</a>), ethereum (ETH) and issuing stablecoins like tether (USDT).</p> 
  <p>However, with the foundational law established, EBA authorities&nbsp;<a target="_blank" href="https://crypto.news/sharks-and-whales-turn-to-stablecoins-signaling-bull-run/" rel="noopener noreferrer nofollow">predict</a>&nbsp;an increase in stablecoin launches in the upcoming months. Hence, they advise businesses to utilize their guiding principles about good governance and risk management before these restrictions become effective.</p> 
  <p>The EBA said:</p> 
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   <p>&nbsp;The statement is devised to propel timely preparatory maneuvers towards MiCAR application, aiming to mitigate risks of potentially disruptive and abrupt business model adaptations at a later phase, to promote supervisory convergence, and to boost consumer protection.</p> 
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   <div class="wp-block-embed__wrapper"> <iframe title="EU Markets in Crypto-Assets (MiCA) with Seth Hertlein, Patrick Hansen, &amp; Rebecca Rettig" width="1020" height="574" src="https://www.youtube.com/embed/djUApgzM5RA?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe> 
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  <p>In related news, the European Securities and Markets Authority (ESMA), another EU body, established preliminary rules for crypto asset service providers. </p> 
  <p>These laws are designed to license CASPs while maintaining a clear separation between customer and trading assets. </p> 
  <p>This is a move to prevent any potential intermingling of customer and corporate funds, as seen following the&nbsp;<a href="https://crypto.news/sam-bankman-fried-explains-how-his-crypto-empire-fell/" target="_blank" rel="noopener noreferrer nofollow">collapse</a>&nbsp;of FTX.</p> 
  <p>When the&nbsp;<a target="_blank" href="https://crypto.news/esma-warns-of-unregulated-crypto-before-mica-launch/" rel="noopener noreferrer nofollow">ESMA regulations</a>&nbsp;take effect in January 2025, they will not include a compensation plan for customers who incur losses on investments in unbacked crypto assets.&nbsp;</p> 
  <p>In October 2023, the EBA plans to publish a second set of draft guidelines. These will explore the capital requirements of stablecoin issuers and how businesses ought to manage stablecoin redemptions in fluctuating markets.</p> 
  <p> Read more: <a href="https://crypto.news/european-regulation-takes-a-major-step-toward-identifying-bitcoin-users/" rel="noopener noreferrer nofollow"> European Regulation Takes a Major Step Toward Identifying Bitcoin Users </a> </p>
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Stablecoin issuers in Europe advised to start complying before 2024

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