The EU’s MiCA regulation, effective June 2024, imposes strict rules on non-euro stablecoins, capping transactions at 1 million daily for non-EU currency-pegged tokens and banning algorithmic stablecoins. These measures aim to protect the euro’s dominance and ensure financial stability but may fragment the market. Non-compliant stablecoins like USDT face delisting risks, pushing issuers like Tether and Circle to adapt or exit the EU. This could drive smaller firms to less-regulated jurisdictions, reducing competition and innovation. While large players may absorb compliance costs, startups face barriers, potentially consolidating the market. The restrictions might also limit EU consumers’ access to diverse stablecoins, creating a divide between EU and global markets. MiCA’s balance between regulation and innovation will shape whether it fosters a secure market or stifles growth.