DEA argues for Europe to use stablecoins for M2M Payments
- The Digital Euro Association’s (DEA) report argued that Europe can use stablecoins for machine-to-machine (M2M) payments
- Euro-pegged stablecoins not as popular as USD-pegged stablecoins yet
The Digital Euro Association (DEA) has issued a report, arguing that Europe can use stablecoins for machine-to-machine (M2M) payments – A growing category of financial transactions.
The report titled – “The future of machine money – Opportunities for stablecoins in Europe” – throws light on how Europe can harness the potential of stablecoins to help develop the Internet of Things (IoT). Once regulations are in place, the DEA sees automated micropayments as a way for Europe to maintain its digital competitiveness.
There are growing use cases for M2M micropayments in industrial, home and office settings, such as handling charges for shipping containers, cloud storage, and other services.
According to the report, stablecoins could increase scalability and reduce or eliminate intermediaries, alleviating the usability and security challenges that APIs present. M2M payments also allow Europe to take advantage of stablecoin technologies to a greater extent as many of its features are more applicable elsewhere.
The European Central Bank has given M2M payments low priority for a digital Euro design. In the long run, incorporating stablecoins into the financial system may become crucial.
Euro-pegged stablecoins not very popular; MiCA being deliberated
However, as long as Euro-pegged stablecoins are concerned, they are not as popular as USD-pegged stablecoins.
Tether and Circle, the world’s largest stablecoin issuers, both have Euro-backed stablecoins in circulation. Euro Tether (EURT) has a market cap of $220,177,421, with over 200 million tokens in circulation. Tether’s USD-pegged stablecoin (USDT) has a market cap of $71 billion. Circle’s Euro Coin (EUROC) has a market cap of $33,873,712. Circle’s USD-pegged stablecoin (USDC) has a market cap of $43 billion.
The European Union (EU) has been deliberating on cryptocurrency regulations, also known as Markets in Crypto Assets (MiCA). However, the EU has been postponing a vote on the bill for some time.
The MiCA legislation was approved by the European Parliamentary Committee in October 2022, nearly two years after it was first introduced in September 2020. The final vote on MiCA was recently postponed until April 2023. It had previously been pushed back from November 2022 to February 2023.
With MiCA, European policymakers hope to create a standard regulation that will establish harmonized rules for crypto-assets at the EU level. This will provide legal certainty for crypto-assets that are not currently covered by EU legislation.