Gold-Backed Stablecoins: When MiCA Says "Enough is Enough"
- BECTRA
- May 7
- 2 min read
When Your Gold-Backed Stablecoin Becomes Too Popular
Imagine your gold-backed stablecoin becoming the darling of the market, used extensively as a means of exchange. While success is sweet, the European Union's Markets in Crypto-Assets Regulation (MiCA) introduces specific thresholds that, if crossed, require immediate action.
According to Article 23 of MiCA, if your stablecoin exceeds the following thresholds within a single currency area:
Over 1 million transactions per day, or
A daily transaction volume exceeding €200 million,
you must cease issuing your stablecoin. These limits are designed to prevent potential risks to financial stability and monetary policy transmission.
⏱️ 40 Days to Present a Remediation Plan
Upon breaching these thresholds, you have 40 working days to submit a detailed plan to your national competent authority, outlining how you intend to reduce usage below the specified limits. Resumption of issuance is contingent upon approval of this plan and evidence that future usage will remain within acceptable bounds. (Chainalysis)
Continued Reporting Obligations
Even if issuance is halted, your obligations don't end there. You must continue to provide quarterly reports to the relevant authorities, including:
The number of token holders
The total value of tokens issued and the size of the reserve assets
The average number and aggregate value of daily transactions
An estimate of transactions used as a means of exchange within a single currency area.
These reports are essential for regulatory bodies to monitor the impact of your stablecoin on the financial system.
Balancing Success with Compliance
While the popularity of your gold-backed stablecoin is commendable, it's crucial to balance growth with regulatory compliance. Adhering to MiCA's thresholds ensures the stability of the financial system and maintains trust among users and regulators alike.
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