A group of cryptocurrency lobbyists has forwarded a warning letter to the European Union commission to stop its MiCA bill from banning stablecoins. The crypto group stated that the MiCA proposal might have a devastating effect on the cryptocurrency markets if pushed.
A few days ago, there were reports that EU members were debating a move to ban stablecoins like Tether and U.S. Dollar coins in the member countries. The proposition was tagged Market in crypto Asset legislation which could order all its member countries to place an embargo on stablecoins.
“Ban On Stablecoin, Very Harmful” – Blockchain Association
Two European cryptocurrency associations forwarded their appeal to the European Commission to rescind its decision on stablecoins. The groups, Blockchain and Digital Associations group, enlightened the commission on the dangerous action of the legislation.
According to the groups, if the ban is pushed, the effect will be disastrous on Teter, US dollar coins, and others. Possibly, it may cause crashes and migration of crypto companies and users out of Europe. The MiCA framework will impact stablecoins negatively, as the regulations are not relatable to the European economy.
If the move is pushed without debate, the European cryptocurrency space will suffer after-effects. The MiCA bill/movement was recently proposed by the European Commission, which has received the support of most councils.
The proposal seeks to ban stable cryptocurrencies like; Tether (USDT), Binance US Dollars (BUSD), and United States Dollar coin (USDC) in all its member countries. All currencies not in their member country’s denomination will be suspended. The tokens should not be issued, or neither allowed for exchange or trading.
Stablecoins, Not Capable Of Competing In The Crypto Market
The two-lobbyists cryptocurrency group allegedly revealed in the letter that stablecoins were not capable of competing in the cryptocurrency markets. The groups showed that stablecoins in Euro domination could not compete in the cryptocurrency markets.
The groups stated that the proposed stablecoins in the other continental domination ban would not affect the currencies but the markets. The United States dollar-based stablecoins constitute a small percentage of the member country’s trading volume.
The European-based stablecoins trading volume is pegged at $53 billion, with some of the coins pegged at around $21 million. The group appealed to the Europe commission to rescind/debate the proposal, as the current draft is harmful to the crypto space. The appeal asked the commission to consider the positive effect of the coin in virtual assets trading.
The adverse effects of the suspension may cause; long-term volatility and migration of crypto operations from the European coasts. The member country would not fully grasp or leverage blockchain technology.