Stablecoins and Redemption : Yes, You Can Get Your Money Back… And Even Easier Than Your Last Amazon Refund !

BECTRA
Mar 10
2 min read

Your stablecoin is redeemable at any time. So relax, stop refreshing your app 15 times a minute, and enjoy your time.

Article 49 of the MiCA regulation guarantees the redemption of stablecoins. Here’s what you need to know:

1️⃣ Instant Redemption: Your Right Under MiCA

According to the MiCA regulation, a stablecoin issuer is required to redeem stablecoins at the holder's request, anytime.

🔹 Redemption at face value – The issuer must redeem the tokens at par value, meaning 1 stablecoin = 1 unit of the underlying fiat currency (e.g., 1 EURC = 1 €).

🔹 Fiat currency only – The redemption must be made in traditional currency (euros or dollars), not in electronic money or cryptocurrency.

Example: A Business Securing Its Profits in Stablecoins

Imagine ABC Company decides to invest €80,000 from its treasury in Bitcoin.

Bitcoin rises to €100,000, so ABC converts this amount into EURC stablecoins from Circle, protecting its gains from market volatility.

Later, when ABC wants to retrieve its €100,000, it can simply request a redemption from Circle, ensuring an instant payout at full value.

Redeeming your stablecoins is now easier than getting your security deposit back after a rental!

This example highlights how stablecoins offer protection against crypto market volatility. If a stablecoin were truly unstable, it would just be called a coin! 😊

2️⃣ Redemption Conditions: Transparency Is Key

MiCA mandates that stablecoin issuers must clearly disclose their redemption terms in their white paper.

A great example is CIRCLE : Their EURC white paper is available here : Circle EURC White Paper.

The detailed redemption policy can be found here : Circle Redemption Policy.

Issuers must ensure that redemption conditions are easy to understand and fully transparent for users.

3️⃣ No Hidden Fees: But Watch Out for Bank Charges !

MiCA prohibits stablecoin issuers from charging redemption fees, except in cases where the issuer activates a recovery plan.

However, be aware of potential third-party fees :

Your bank might charge:

Currency conversion fees (if you're redeeming USDC into euros, for example).
Deposit fees for receiving funds into your bank account.

Bottom line ? MiCA ensures you get your stablecoins redeemed for free, but if your bank decides to sneak in an exit fee, that’s a whole different story !