Tether Backs Stablecoin Rival as MiCA Looms in EU

Two new stablecoins are being launched as the European Union prepares for a significant shake-up of crypto regulations.

Quantoz, which is based in The Netherlands, has begun issuing EURQ and USDQ, pegged to the euro and dollar respectively.

It comes six weeks before the remaining measures of Markets in Crypto-assets (MiCA for short) kick in.

Quantoz's digital assets are going to be issued on the Ethereum blockchain, with its activities authorized and supervised by the Dutch central bank. The company's CEO, Arnoud Star Busmann, said:

"The MiCA regulation brings a new level of trust to digital assets markets, not least through its prudential requirements on the issuers of stablecoins. As the world of payments becomes more digital, having well-regulated, transparent and fully backed stablecoins is critical to enabling faster, cheaper and more secure settlement within the world's largest single market."

As you would expect, the EURQ and USDQ in circulation is fully backed on a one-to-one basis and overseen by an independent foundation — along with an additional 2% on Quantoz's own balance sheet.

Tether is among the investors in Quantoz, and that's significant because USDT is set to be delisted from European exchanges by the year's end.

Stablecoin Race in the EU

Despite Tether commanding a market-leading position, with its flagship stablecoin attracting a market capitalization of $128 billion, the issuer doesn't currently have the required license within the trading bloc.

Disruption for crypto traders losing access to USDT and EURT will be mitigated by Quantoz alternatives making their debut on Bitfinex and Kraken.

Meanwhile, Coinbase offers alternatives including USDC and EURC. They're issued by Circle, which has selected France as a regulatory base and claimed to offer the first MiCA-regulated stablecoin.

Both EURC and Tether's EURT are eclipsed in terms of size by EURS, which has been issued by Statis Network. It boasts a market cap of $130 million, and claims to be the first stablecoin on the continent to have reserves fully backed by cash.

Other competitors on the horizon include Paxos, which has acquired the Finland-based electronic money institution Membrane Finance as it prepares to rollout MiCA-compliant stablecoins in the trading bloc.

The final stage of the MiCA rollout matters because it will allow a crypto firm in one EU member state to trade across them all.

The next phase of the rollout might not be without teething troubles. A survey at the end of June revealed that just 9% of the firms in scope for MiCA are fully prepared — with a further 25% yet to begin making changes.