The European Union's Markets in Crypto-Assets (MiCA) regulation saw its stablecoin provisions come into force in mid-2024, imposing new requirements for euro-referencing tokens. Under the rules, any stablecoin pegged to the euro must qualify as an e-money token (EMT) and be issued by a licensed e-money institution or credit institution. The move is reshaping how digital euro-denominated tokens operate, even as the European Central Bank pushes ahead with its own digital euro project and wholesale settlement experiments.
What MiCA demands from stablecoin issuers
MiCA's stablecoin framework treats euro-referencing tokens as EMTs, meaning issuers must hold proper authorization under EU e-money or banking law. That's a high bar for many crypto-native projects. Circle, the company behind the USDC and EURC stablecoins, is structuring its EURC token for MiCA compliance via a licensed EU entity after securing e-money authorization in France in 2024. Other euro-denominated tokens like Membrane Finance's EUROe and Monerium's EURe are positioning themselves as regulated e-money on-chain, each supporting different blockchains.
The requirement applies to any token that aims to maintain a stable value relative to the euro. Issuers must also meet reserve and redemption obligations. The idea is to bring stablecoins under the same oversight as traditional electronic money.
ECB's parallel track: digital euro and wholesale settlement
While MiCA governs private stablecoins, the European Central Bank is working on its own central bank digital currency. The digital euro project continues to advance, though a final launch decision remains pending. Separately, the ECB is running wholesale settlement experiments that would allow tokenized assets to settle directly in central bank money. Those experiments use so-called trigger links or dedicated distributed ledger technology (DLT) modules to connect tokenized markets with core payment systems.
The ECB has made clear that private tokens can complement settlement infrastructure, but they won't replace the role of central bank money. That stance puts a boundary around how far stablecoins can go in the financial system's backbone.
Banks test tokenized commercial money on permissioned ledgers
European banks haven't waited for the ECB to finish its work. Several are piloting tokenized forms of commercial bank money. Société Générale's digital asset unit, SG-Forge, has issued the EUR CoinVertible (EURCV), a euro-denominated token on a permissioned ledger. Another project, referred to as a Qivalis-style instrument, is being developed for regulated networks and corporate workflows. These pilots aim to make bank money programmable and faster to transfer, especially for institutional clients.
The pilots operate on closed, permissioned blockchains rather than public networks. That design keeps them inside the regulatory perimeter while still testing the efficiency gains of tokenization.
The line between private tokens and central bank money
MiCA and the ECB's work are heading in roughly the same direction: more regulated, more standardized digital money in Europe. But they're not the same thing. Stablecoins like EURC or EURe are private money, issued by companies and backed by reserves. The digital euro would be a direct liability of the central bank. The ECB's statement that private tokens can only complement, not replace, central bank settlement infrastructure draws a bright line.
For now, stablecoin issuers are racing to meet MiCA's authorization deadlines. The ECB continues its experimentation. And banks are building their own tokenized money layers. The next concrete milestone is likely the ECB's decision on whether to proceed with a full digital euro launch, expected after further testing and a potential legislative process in the European Parliament.
