- Digital Euro Association (DEA) report stated that Europe can use stablecoins for machine-to-machine (M2M) payments
- Euro-pegged stablecoins not yet as popular as USD-pegged stablecoins
The Digital Euro Association (DEA) has released a report stating that Europe can use stablecoins for machine-to-machine (M2M) payments – a growing category of financial transactions.
The report titled – “The Future of Machine Money – Opportunities for Stablecoins in Europe” – sheds light on how Europe can harness the potential of stablecoins to help develop the Internet of Things (IoT). Once the regulations are in place, the DEA sees automated micropayments as a way for Europe to maintain its digital competitiveness.
There are an increasing number of use cases for M2M micropayments in industrial, home and office environments, such as shipping container handling fees, cloud storage and other services.
According to the report, stablecoins could increase scalability and reduce or eliminate middlemen, alleviating the usability and security challenges posed by APIs. M2M payments also allow Europe to take greater advantage of stablecoin technologies, as many of its features are more applicable elsewhere.
The European Central Bank has given M2M payments low priority for a digital euro design. In the long run, incorporating stablecoins into the financial system could become crucial.
Euro-pegged stablecoins not very popular; MiCA is being deliberated
However, as long as Euro-pegged stablecoins are concerned, they are not as popular as USD-pegged stablecoins.
Tether and Circle, the world’s largest stablecoin issuers, both have euro-backed stablecoins in circulation. Euro Tether (EURT) has a market cap of $220,177,421, with over 200 million tokens in circulation. Tether’s USD-pegged stablecoin (USDT) has a market cap of $71 billion. Circle’s Euro Coin (EUROC) has a market cap of $33,873,712. Circle’s USD-pegged stablecoin (USDC) has a market cap of $43 billion.
The European Union (EU) is deliberating on cryptocurrency regulation, also known as Markets in Crypto Assets (MiCA). However, the EU has been postponing a vote on the bill for some time.
The MiCA legislation was approved by the European Parliament committee in October 2022, almost two years after it was first introduced in September 2020. The final vote on MiCA was recently postponed to April 2023. Previously, it had been postponed from November 2022 to February 2023.
With MiCA, European policymakers hope to create a standard regulation that will establish harmonized rules for crypto-assets at EU level. This will provide legal certainty for crypto-assets that are currently not covered by EU law.