Aave Launches MiCA-Compliant EURC Stablecoin on Base

Aave has introduced Circle’s EURC (EURC) stablecoin on the Base layer 2 blockchain, allowing users to employ it as collateral for lending and borrowing.

As a decentralized lending platform, Aave (AAVE) adds EURC to its Base market, enabling users to either borrow EURC or use it as collateral for taking out loans. This addition broadens the borrowing options on Aave beyond the existing USD-pegged stablecoins like USD Coin (USDC), Dai (DAI), and Tether (USDT).

This move aligns with the increasing trend among DeFi platforms to offer more than just dollar-pegged stablecoins, following the activation of EURC markets by protocols like Fluid and Moonwell on Base last year.

Additionally, the integration of MiCA-compliant stablecoins has gained momentum among crypto service providers since the MiCA regulation implementation. For instance, Binance recently indicated plans to delist nine non-compliant stablecoins, such as USDT and DAI, for customers in the European Economic Area. Likewise, Coinbase removed non-compliant stablecoins, including Tether, urging users to switch to compliant options like USDC and EURC.

What is MiCA?

MiCA (Markets in Crypto-Assets) compliance mandates that stablecoins and crypto assets adhere to strict European Union regulations. Issuers need to be registered in the EU, disclose reserves regularly, and undergo audits to prevent fraud. Consumers have the right to redeem stablecoins at a 1:1 rate for fiat currency, with issuers required to maintain fully backed reserves in secure assets. The European Banking Authority and national regulators oversee compliance and can ban non-compliant assets, as well as intervene in cases of financial instability.

Circle, the issuer of EURC and USDC, became the first stablecoin issuer licensed under MiCA on July 1.

> BREAKING NEWS: @Circle announces that USDC and EURC are now available under new EU stablecoin laws; Circle is the first global stablecoin issuer to be compliant with MiCA, issuing both USDC and EURC to European customers as of July 1st.
>
> Details… pic.twitter.com/isNBumoi3e
> — Jeremy Allaire – jda.eth / jdallaire.sol (@jerallaire) July 1, 2024

Related Articles:

• Binance Announces Delisting Deadline for Non-MiCA Stablecoins
• Circle wins Europe’s first stablecoin license via MiCA