MiCA, the European Union’s digital asset regulation, ends in 2023 and will take effect at the end of that year. However, the European Securities and Markets Authority (ESMA) report, issued on Wednesday, states that the law did not result in an increase in euro-denominated cryptocurrency transactions.
The two main findings from this analysis are that stablecoins play a vital role in nearly 60% of cryptocurrency transactions worldwide. This type of digital asset can be backed by traditional currencies and commodities, allowing investors to change their investing strategy without exiting the cryptocurrencycurrency ecosystem.
Regardless of the EU’s attempts to regulate the cryptocurrencycurrency sector, the euro share remains at 10% for on-ramp and off-ramp transactions. Since the launch of MiCA, the euro’s participation has been characterized as modest, with the US dollar and the South Korean won accounting for more than 80% of these transactions.
According to the paper, the majority of trading occurs on a few major exchanges, posing a threat to market fragmentation. Binance alone processes over half of all trading volumes, while the other ten exchanges control more than 90% of transactions.
