Part 6/9:
The Role of Regulation in Stable Coins
Beyond backing, regulation significantly influences the variety and usability of stable coins across different jurisdictions. Regulations can determine which stable coins are legally permitted and compliant, affecting their availability and acceptance.
European Regulatory Approach
Europe has introduced new Micro regulations, treating stable coin issuers similarly to banks. These rules demand licenses, full reserves on a one-to-one basis, and independent audits. As a result, USDC, which fits these criteria, is fully approved for use in Europe. Conversely, USDT, which has not undergone a full independent audit, faces restrictions, leading many European exchanges to remove USDT trading pairs.