EU MiCA Stablecoin Regulation Faces Criticism as Bank of Italy Flags Gaps, Tether Risks Highlight Market Uncertainty
The regulatory landscape for stablecoins in Europe is under scrutiny as the Bank of Italy’s governor, Fabio Panetta, has raised concerns over the sufficiency of the EU’s Markets in Crypto-Assets (MiCA) framework. Panetta warned that MiCA does not offer comprehensive protection against stablecoin risks, citing the fact that only a few issuers such as Circle (USDC) have obtained regulatory approval, while key players like Tether (USDT) remain unregistered, increasing market uncertainty. The ongoing possibility of Tether’s removal from European exchanges could directly impact stablecoin liquidity and trading pairs in the region. Panetta also highlighted that inconsistent international regulation leaves European investors exposed, even with MiCA enforcement, and cautioned that deeper integration between digital assets and the banking system could undermine financial stability if consumers conflate crypto products with traditional banking instruments. He advocated for the rollout of a digital euro (CBDC) to preserve monetary sovereignty and decrease dependence on U.S. stablecoins. Meanwhile, Circle’s MiCA-compliant status, Stripe’s expansion into stablecoin payments, and growing banking interest in stablecoin integration point to continued mainstream adoption and a surging market cap, which surpassed $250 billion in 2025. Overall, the news spotlights both regulatory hurdles and rapid growth in European stablecoin usage, signaling ongoing volatility and potential shifts in crypto trading dynamics.
Bearish
The news is bearish for key stablecoins, particularly USDT, due to the potential for Tether to be delisted from European exchanges under the MiCA regime, directly affecting its liquidity and usage across European trading platforms. Regulatory uncertainty and the Bank of Italy’s criticism suggest heightened scrutiny and possible trading restrictions, which can dampen trader confidence, increase volatility, and reduce accessibility in the short term. While the broader stablecoin market continues to grow—evidenced by Circle’s compliance and market cap expansion—immediate risks tied to regulatory gaps and the fate of non-compliant stablecoins outweigh positive adoption trends for now. In the long run, more regulatory clarity and a possible digital euro could shift market share, but the near-term outlook for affected stablecoins remains negative.