A sweeping new regulatory landscape in the European Economic Area (EEA) has left most stablecoin issuers grappling with challenges, with Circle and Société Générale-Forge emerging as clear beneficiaries. According to data from the European Securities and Markets Authority (ESMA), just nine out of approximately 23 electronic money token (EMT) issuers in the region have secured both EMT and crypto-asset services provider (CASP) authorization under the newly enforced Markets in Crypto-Assets (MiCA) regulation.
Custody restrictions hinder service offerings
The majority of European stablecoin issuers lack permission to hold custody of their own tokens on behalf of clients, significantly narrowing the suite of services they are able to provide. This regulatory bottleneck, driven by the incomplete rollout of full MiCA authorization, has forced 14 issuers into a tight corner, limiting their commercial operations in the B2B space.
Patrick Hansen, Head of EU Strategy and Policy at Circle, noted the surprising lack of action from competitors, stating that many issuers did not respond proactively to the new requirements. He highlighted that, as a result, Circle and Société Générale-Forge, the primary issuers of USDC and EURC, have gained a strategic edge over rivals, especially in capturing institutional capital.
Most stablecoin issuers in the EU cannot provide custody of their own tokens on behalf of clients. This severely limits the range of services they can offer, with only a few players positioned to benefit from this fragmentation.
For retail users of euro stablecoins, these developments have had little effect. Individuals can freely move tokens between their non-custodial wallets. However, corporate clients face significant barriers, as issuers without CASP approval are not allowed to provide custody services or process automated payouts for businesses.
Delays and forced alliances shape the market
Launching B2B services requires issuers to complete a notification process under Article 60 of MiCA, which often takes several months to a year in key jurisdictions like France and Luxembourg. Rather than waiting for lengthy compliance reviews, many issuers have started to rely on third-party regulated platforms, sparking a wave of strategic partnerships within the sector.
A prime illustration is the EURØP stablecoin from Schuman Financial, which holds EMT status but lacks CASP authorization. To overcome this restriction, Schuman Financial has integrated its stablecoin directly into the XRP Ledger blockchain and utilizes the European MiCA CASP and EMI licenses of Ripple, enabling it to offer legal custody and transfers in 30 European countries.
This environment has accelerated the formation of B2B alliances, as issuers unable to manage their assets independently must seek partnerships with entities holding the necessary regulatory permissions.
Market participants expect the regulatory imbalance to persist in the near term. The slow pace of MiCA compliance, particularly across major European markets, means that Circle and Société Générale-Forge are set to maintain their competitive lead for months to come.
B2B landscape rapidly tokenizes real-world assets
Meanwhile, as issuers adjust strategies in response to the custody lockout, new platforms are transforming how institutional clients manage financial assets. Rather than depending on traditional processes with intermediaries, a shift is underway as Wall Street increasingly adopts Web3 technologies. Investors now use platforms such as 1stepSwap to hold shares of major US companies, as well as gold and silver, directly in their crypto wallets. By tokenizing real-world assets and enabling instant market price optimization, these solutions eliminate the need for middlemen.
Until the compliance processes conclude and the sector returns to regular product competition, Circle and Société Générale-Forge are expected to retain a distinct advantage in attracting institutional inflows within the EEA.
